Atos rejects bid from rival for digital, big data, security units

Despite having €4.2b reasons from Onepoint to ditch Evidian strategy and sell up

Shape-shifting outsourcing biz Atos has rejected a joint bid of €4.2 billion ($4.09 billion) from tech consultancy Onepoint and Brit private equity fund ICG to buy its digital, big data and security divisions.

The business unit, collectively branded as Evidian, is part of Atos's turnaround plan hatched by the board in June. Evidian will be spun out into a separate publicly traded entity, leaving the datacenter, hosting, digital workplace, unified comms, and BPO divisions housed in a Tech Foundation Co.

The strategy has already led to a change at the top of the organization, with CEO Rodolphe Belmer leaving the business this month, having only joined in January. Shareholders are also concerned about the scale of the restructure.

In a statement to investors, Paris Stock Exchange-listed Atos said it received an "unsolicited letter of intent" from Onepoint and ICG related to the "potential acquisition of the 'Evidian' perimeter" for an enterprise value of €4.2 billion ($4.09 billion).

"Following the thorough examination of this preliminary and non-binding mark of interest, and upon the recommendation of its ad hoc committee, the Board of Directors has convened and unanimously concluded that it is not in the interest of the company and its stakeholders. The Board of Directors has therefore decocted not to proceed."

Onepoint, established in 2005, says it has operations in 14 locations in Europe, North America, North Africa and Asia Pacific. It offers consultancy on digital transformation – itself a wide-ranging term – and other services, including, er, "building digital worlds" and helping customers consider new business models.

Customers listed on its website include UK retailer Dixons Carphone, Vision Express and Network Rail.

David Layani, chairman at Onepoint, said in a statement he invites Atos to reconsider its position.

"All the conditions are on the table: attractive price, secured financing, ambitious industrial project aligned with Atos' strategic plan. Together, we could preserve our values and build a French technology champion with an international reach.

"With this offer, we would be able to leverage our ability to serve our customers from end-to-end. This business combination would strengthen France's digital sovereignty by developing the most strategic expertise, particularly in cybersecurity, on French soil. It is also an ambitious project for employment."

Under the terms expressed by Onepoint, Atos would retain a 30 percent stake in Evidian, which is due to be spun out in 2023. The deal would be financed by a rights issue amounting to €2 billion and by a €2.2 billion further issue of existing debt notes. €4 billion would be deployed over four years to fund the "transformation" of the new group's subsidiaries.

The newly expanded organization would have 60,000 employees with a plan to grow to 100,000 staffers and €10 billion (c $9.75 billion) in annual revenues in five years, focusing on cloud, business architecture, big data and security.

Atos shareholders have been unconvinced by the turnaround plan as expressed by the Atos board, with Sycamore Asset Management branding the strategy as "too ambitious and complicated." None have yet spoken publicly about this potential embrace with Onepoint.

One thing is certain: Atos needed to change due to pressure from the cloud service providers pinching their customers, a problem that isn't going away. ®