Capgemini Enlarges North American Presence With IGate Buy
Important logic for the deal is that the transaction brings Capgemini IGate's flagship clients, which include General Electric and Royal Bank of Canada.Paris-based IT consulting and outsourcing giant Capgemini revealed April 27 that it will acquire a major U.S. competitor, IGate, for about $4 billion, or $48 per share. This transaction will result in an enlarged multinational company with an estimated combined revenue of $13.6 billion in 2015, an operating margin above 10 percent and about 190,000 employees. IGate strengthens Capgemini's global reach in key businesses such as application and infrastructure services, business-process outsourcing (BPO) and engineering services. But important logic for the deal is that the transaction brings Capgemini IGate's flagship clients, which include General Electric and Royal Bank of Canada. Twenty-five-year-old IGate has complementary businesses in infrastructure services (3,000 full-time employees), vertical BPO (3,500 FTEs) and engineering services (3,500 FTEs). Intellectual property offerings, such as its integrated database management system in analytics, show growth potential.
The merger broadens Capgemini's industrialized delivery model globally. The company will use IGate's IP to deploy its internal supply chain development.