The offer values the fully diluted share capital of Bull Group at approximately 620 million euro. The offer is subject to reaching a minimum 50% + 1 share of Bull's share capital acceptance level, and Atos intends to ultimately delist the Bull shares by way of squeeze-out or a subsequent merger between the two companies.
On Sunday May 25th, 2014, the Board of Directors of Bull has expressed its full and unanimous support for the transaction and has appointed pursuant to the AMF regulation an independent expert to provide a fairness opinion on the terms of the offer.
The Board of Directors of Atos held on Friday May 23rd, 2014 also expressed its full and unanimous support for the transaction.
Crescendo Industries and Pothar Investments, representing in aggregate Bull largest shareholder with 24.2% share capital have both committed to tender their shares to the Atos bid.
Thierry Breton, Chairman and CEO of Atos, stated: "I welcome this combination as a major step to anchor our European leadership in Cloud, Big Data, and Cybersecurity, toward our 2016 Ambition to become a Tier 1 company and THE preferred European global IT brand. Bull's highly recognized teams in advanced technologies such as high computing power, data analytics management, and cybersecurity ideally complement Atos' large scale operations. Thanks to our integration capabilities and operational effectiveness culture, this transaction will strongly benefit Bull and Atos clients, employees, and shareholders."
Philippe Vannier, Chairman and CEO of Bull Group, commented: "Bull Group will strongly benefit from joining Atos, one of the most successful global IT company, in order to accelerate "One Bull" strategic plan implementation. I'm looking forward to being part of this new development within which each member of staff will add their own value. Together with Atos we share the same passion for business technology."
As part of the Atos' "2016 Ambition", this combination will enhance Atos' number 1 position in Cloud services in Europe, anchor its global leadership in Managed Services and Systems Integration. Complementary technologies will further increase Atos' businesses impact and the relevance of its disruptive and innovative offerings.
The combination will reinforce Atos' number 1 European position in Cloud operations with around 400 million euro of revenue in Cloud services, including Canopy. This will substantially enhance the Group's operations in Cloud infrastructure solutions as Bull brings new technical capabilities and technologies that Canopy already had in its R&D roadmap, accelerating time-to-market for specific blocks relevant to Cloud.
Atos intends to create a Big Data & Cybersecurity dedicated entity under the Bull brand with revenue of circa 500 million euro. The objective is to leverage Atos global reach and existing operations in those segments with Bull unique expertise in Cybersecurity and in High Performance Computing (HPC).
Big Data is a fast growing market at circa +40% per year and is expected to reach 12 billion euro through 2015. A significant part of Big Data requires HPC technology and Bull is the European leader in this market. Atos' vertical market knowledge, large customer base, and Systems Integration capabilities combined with Bull expertise in HPC infrastructure, will expand Atos' service offering and bring HPC business at scale. This will also allow Atos to further develop analytics solutions and propose Big Data services to establish its position in this fast growth market.
In the highly fragmented Cybersecurity market where niche players co-exist, the combination of Bull and Atos' Cybersecurity capabilities will create a leading provider of products and services with a distinctive size. The new Group will benefit from in-house R&D, patented technologies, specifically designed hardware and software products in selected segments, such as Cybersecurity and Cloud Security. All Service Lines of the group will benefit from this unique set of assets in order to win large deals as security has become critical to build trust in all digital environments.
Atos Managed Services will be complemented by circa 500 million euro revenue coming from Bull. This will enrich current Atos' offerings as Bull's expertise in Mission Critical Maintenance services and Mainframe Migration services will enable Atos to address new verticals with an increased scale. Bull will bring new mainframe migration capabilities and solidify further the strategic partnership with EMC.
In Systems Integration, the contribution of circa 300 million euro revenue from Bull will increase Atos' scale and the extension of the customer base will allow cross-selling of Atos' offers, especially in Manufacturing, Banking, Defense, and Public Sectors. The alignment of Bull's scope on Atos best practices through an operational improvement programme is expected to generate higher project margin in line with Atos three-year plan.
From a geographical standpoint, the combination will strengthen Atos' European leadership, especially in France where combined revenue will exceed 2 billion euro (pro forma 2013) with a strong footprint in the public and banking sectors.
The combination will improve operational effectiveness by reducing SG&A including real estate, and decreasing purchasing costs by leveraging the combined higher scale.
Cost synergies potential is estimated at 80 million euro per year on a run rate basis within 24 months, consisting of:
These costs synergies are backed by a well identified and planned integration strategy within Atos' operations, based on already experienced transformation programs in previous large transactions.
The implementation costs are estimated at 45 million euro over a 24 months period. This amount comes in addition to the 50 to 60 million euro costs of the "One Bull" plan announced in January 2014. As part of the on-going "One Bull" plan, Bull's top management intends to submit the booking of a provision reflecting these costs to the Bull's Audit Committee and to the Bull's Board of Directors approving the accounts to be closed on June 30th, 2014.
The transaction is expected to be accretive by more than 10% on Atos EPS within 24 months of integration2 and will preserve the solid financial flexibility for Atos to further implement its development strategy.
The terms of the offer can be summarized as follow: