Atos announces Syntel's acquisition
Atos just announced the takeover of Syntel, a 1 BUS$ revenue, 23,000 employee IT service provider, with a strong commercial presence in the USA (90% of Syntel's revenue) and a strong delivery organization in India (85% of Syntel's workforce). The deal will reinforce Atos' presence in the USA, especially in Consulting and Systems Integration for the Financial Services industry. Syntel brings both an interesting horizontal expertise in topics like digital, analytics, mobility, IoT, cloud, automation and applications modernization, and a strong vertical expertise in Banking, Insurance, Healthcare and Retail.
Moreover it will reinforce Atos' offshore capability, tripling the Indian workforce to 30,000 employees. Syntel's efficient and industrialized delivery model will enable both to raise the profitability of Atos' existing business and to address new projects opportunities in Europe.
Atos will also take advantage of Syntel's business development capabilities, both for winning new logos and for developing/ "fertilizing" existing customer relationship.
Somehow the take over will translate in a kind of reverse take over of Atos' B&PS unit (Consulting & SI) by Syntel.
At worldwide level on a pro-forma basis Atos will move from the 10th place in our IT Services ranking to the 7th rank, overtaking Cognizant, Capgemini and NTT Data. Moreover it will help Atos further raising its profitability level, with both a short term (18% net profit margin!) and a medium term impact (synergy potential, for both top line and bottom line).
Looks like a clever move!