Capgemini is set to fulfil its long-term aim of building presence in North American markets through a $4 billion acquisition agreement with New Jersey based technology and services company IGATE. The deal is expected to close in the second half of this year and will make North America Capgemini’s largest region, representing 30% of estimated combined revenues of €12.5 billion in 2015.
The acquisition will also reinforce Capgemini’s financial services business as 42% of IGATE’s total revenues of $1.3 billion are generated from the sector. Financial services clients transitioning to Capgemini include Royal Bank of Canada. The enlarged company will also benefit from IGATE’s Data Management Services business, which is dedicated to the investment banking industry and is developing shared services based on the data utility model and built on Markit’s enterprise data management platform.
The acquisition adds 33,000 IGATE employees – some 75% are based in India – to Capgemini’s 145,000 and is expected to result in over 100,000 employees working in Capgemini’s Rightshore outsourcing and near-shore delivery centres. It will also add over 250 clients, cross selling opportunities and revenues that will promote Capgemini into the league of Indian technology players such as TCS and Infosys, but not into the premier league dominated by US headquartered Accenture.
Capgemini and IGATE forecast a smooth integration period, with a new organisation in place within three months of closing and integration of the companies expected to be complete within nine months. Paul Hermelin, long-standing chairman and CEO of Capgemini, said: “IGATE is a leading company that perfectly fits our strategic ambition. It will give us a new status on the American market and take our industrialisation journey further to offer ever more competitive services to our clients.”
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