Capgemini To Buy US Based IGate In $4 Bn Deal

Capgemini is a French multinational consulting corporation headquartered in Paris,France.It provides IT services and is one of the world’s largest consulting,outsourcing and professional services company.It was founded in 1967 by Serge Kampf,current vice chairman in Grenoble,France.Services are delivered through four disciplines-Consulting,Technology,Outsourcing, and local Professional services.

Capgemini plans to buy United States based IGate Corp for $4 billion cash to make North America its biggest share of market.IGate is a technology and services company with strength in the financial services sector and also plays a role in retail,manufacturing and healthcare.In 2014,IGate company earned a revenue of $1.3 billion.It is a double digit growth company and a 19 percent operating margin.Igate has about 80 percent of its operations in North America which capgemini said is”by far the largest and most innovative technology and services market in the world”. The deal will be financed through a combination of capgemini’s own cash,debt and an equity portion that will not exceed a 6 percent dilution of the French company’s share capital.Also capgemini said it had the backing of shareholders which represents 54 percent of IGate’s share capital and the deal will enhance earnings by 12 percent in 2016 and 16 percent in 2017.Capgemini said in a separate statement that sales grew by 10.5 percent in the first quarter and raised its 2015 growth target to at least 5 percent from its previous forecast of between 3 percent and 5 percent.A deal will require various regulatory approvals and is expected to close in the second half of this year.An acquisition will strengthen Capgemini’s business in application and infrastructure services as well as in business process outsourcing and engineering services.’IGate is a leading company that perfectly fits our strategic ambition’, CEO Paul Hermelin of capgemini said in his statement and ‘it will give us a new status in the American market’. In addition to the geographic and portfolio perks,the deal will also widens Capgemini’s client base with existing IGate customers like General electric and Royal Bank Of Canada.

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