Capgemini Buys IGATE For £2.6 Billion

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Largest Capgemini acquisition since 2000’s Ernst & Young purchase will see company expand North American operations

French IT services provider Capgemini will acquire IGATE for £2.6 billion ($4bn) , a move which will see the new entity aggressively expand its North American presence.

The acquisition, which was announced today for a cash consideration of $48 (£32) per share, will lead to a group with an estimated combined revenue of £9 billion in 2015, an operating margin above 10% and around 190,000 employees, said Capgemini.

“Important transaction”

Capgemini’s CEO Paul Hermelin called the move an “important transaction in Capgemini’s history”, as the acquisition fulfils one of the company’s targets of expanding its presence in the North American market.

Following the deal’s completion, North America will account for around 30 percent of all Capgemini’s revenue, a majority, compared to more than 70 percent of the firm’s revenue coming from the UK and Ireland in the last quarter.

CapgeminiHermelin said: “It will give us a new status on the American market, and take further our industrialisation journey to offer ever more competitive services to our clients. This will also give to the Group’s Indian operations a new scale, allowing us to compete on par with the best US-based and Indian-based companies.”

The move sees Capgemini ramp up its efforts against IBM and Accenture in the region, with an estimated 50,000 employees set to be working with Capgemini’s North American clients.

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