Atos Buys Bull For Estimated $845 million
Atos Buys Bull For Estimated $845 million
In a move that will have repercussions for the cloud computing industry across the world, Atos is set to buy Bull in the French IT sector. The deal is valued at approximately $845 and the aim is to create a world class cloud computing and cyber security firm that can challenge the best in the business.
This fast growing cloud computing industry is lead by US based Amazon currently with Microsoft on the second spot. The two companies announced the deal on Monday and it is valued at around 620 million euros. Considering that the cloud services is growing at the compound annual rate of 25 to 50 percent, this deal has a lot of significance for the cloud computing services industry.
The deal is valued at 4.90 euros per share and it represents a 30% premium to the 3 month weighted average share price of Bull. The combination will lead to the delivery of about 80 million euros on an annual basis for cost savings in the 2 years. This is equal to the 25% net profit obtained by Atos in 2013.
Analysts have pointed out the rationale behind the transaction as well. The relatively low multiple for Bull provides it with a massive enterprise value of over 9 times in earnings without taking factors such as tax and amortisation into account and the good track record on acquisitions by Atos are being discussed.
Both companies registered an increase in shares. Atos is 9 times larger than bull in terms of market value linked to its offer price. The deal will buck up the fortunes of this company in sectors such as healthcare and manufacturing. Its expansions in countries like Africa and Brazil are also being discussed.
Bull is known for its critical and complementary capacities with respect to big data. Atos is renowned for its solutions. This acquisition targets the high growth segment of cloud computing which is catching on fast in current times. The 2 main shareholders of Bull include Pothar Investments and Crescendo Industries. Both own around 24.2% of the company and have committed to tendering shares.
Atos is also looking to make other conquests. It is aiming to acquire IT services group Steria. However, it is facing a tough battle from Sopra. Atos is looking to build its brand and strengthen its position in the rapidly expanding market.
Bull, once referred to as Compagnie des Machines Bull is a prized acquisition for Atos. Currently both companies rank lower that the top 3 on the cloud computing scene in Western Europe. Combining their resources would cause them to pip Microsoft and IBM to the number 2 position in the industry. Atos is also seeking to gain the top position in Big Data which involves analysis of vast troves of consumer and corporate data. This can drive sales. Cloud computing is the accumulation and storage of data in an organized manner over the internet as opposed to computer hard drives.
The capacity for growth in both sectors in enormous given the massive boom in internet usage and the reliance of companies on internet connectivity for their effective functioning. With changes in the IT sector imminent, Atos has stolen a march over its rivals through its timely acquisition of Bull.
