US-based information technology firm Syntel, owned by Indian-American couple Bharat Desai and Neerja Sethi, has been bought over by French technology services company Atos for $3.4 billion, or $41 per Syntel share, in an all-cash transaction.
Once this deal goes through, the couple, who together hold 57% stake in the company, stand to make a whopping $2 billion. The couple started the company in 1980, while they were still in college.
The Bezons, France-headquartered Atos in a statement late on Sunday said this transaction was in line with the company's strategy to reach a global scale and significantly expand in both digital services and business and platform solutions.
"It represents a transformational step for our business and platform solutions division as it will significantly enhance its growth and profitability profile through an extended digital services offering, cutting-edge India-based delivery platforms, as well as revenue and cost synergies," said Thierry Breton, Chairman and CEO of Atos.
"In particular, the highly complementary portfolio, customer base, and geographic footprint of the combination between Atos and Syntel will significantly enhance our presence in North America and accelerate the digital transformation of Atos's customers worldwide," Breton, added.
Syntel generated $924 million revenue in 2017, of which 89 per cent was in North America, with 25 per cent operating margin.
Syntel employs 23,000 engineers in 30 countries, with over 18,000 staff based in India. All of Syntel's management team is expected to join Atos.
"I am looking forward to welcoming the 23,000 Syntel engineers and their very strong management to continue delivering together the highest value to our clients and shareholders," Breton said.
.@Atos is to acquire @SYNTEL, a leading digital company.Thierry Breton (@ThierryBreton) July 22, 2018
I am very proud to announce such an important milestone and look forward to welcoming the 23,000 Syntel engineers #DigitalLeaderhttps://t.co/qRGFNi5yEQ pic.twitter.com/fUkqvYJj9Z
A major player in Big Data, cybersecurity, High Performance Computing and Digital Workplace, Atos has approximately 100,000 employees in 73 countries and an annual revenue of around 12 billion euros.
"This is a very exciting development for Syntel. The Syntel board is committed to maximising shareholder value and believes that the agreement with Atos achieves that objective and delivers a win-win proposition to our customers and employees," said Bharat Desai, Co-Chairman and Co-founder of Syntel.
"I am confident that this combination will deliver significant value to all stakeholders," Desai said.
The acquisition will be financed through debt fully underwritten by BNP Paribas and J.P. Morgan Securities PLC. The debt will be used to fund the purchase cash consideration together with refinancing of outstanding debt, the company said.