The news that Atos will acquire Syntel did not come as a surprise, as Atos has been quite vocal on its M&A strategy. Syntel has also been looking to strengthen its position after a disappointing 2017 which saw a 4% reduction in revenues over 2016.
Atos has managed to check all the required boxes with this acquisition, such as access to North American client base, a well-recognized and comprehensive range of digital solutions, as well as a strong offshore base to improve utilization. All indicators on paper point that this could be a marriage made in heaven. Atos has been growing extensively in the last 10 years through both organic and inorganic growth. The revenue has grown more than 2X from € 5.6B in 2008 to € 12.7B in 2017, and the employee base also grew from 51,000 in 2008 to about 97,000 in 2017.
Over this period, Atos has seen a phenomenal 11x increase in market capitalization to € 12.8B. However, Atos’ presence in North America has been limited up until now with only 16% of revenue coming from geography. With an impressive clientele in Europe – counting Aviva, Henkel, ThyssenKrupp, and Siemens among others as their clients, Atos has been looking to grow inorganically and expand their “Business & Platform Solutions” business for cross-selling in North America.
This article addresses questions like why Atos+Syntel is a promising partnership and what the future holds.