Capgemini to expand in North America with $4B acquisition of iGate

The deal is being financed by a mix of cash, debt and equity

French IT services company Capgemini is to acquire iGate in the U.S. for US$4.0 billion, in a bid to expand its presence in the North American market.

The deal will boost Capgemini's revenue from North America by 33 percent to $4 billion, making the region the first to account for 30 percent of its revenue.

The iGate acquisition also brings to Capgemini additional expertise in application and infrastructure services, business process outsourcing and engineering services. Capgemini also gets iGate's clients, including key customers such as General Electric and Royal Bank of Canada, to whom it can now cross-sell its own services.

After the acquisition, the merged entity will have an estimated combined revenue of €12.5 billion ($13.6 billion) in 2015, an operating margin above 10 percent and around 190,000 employees. About 50,000 of these employees will be focused on North American clients.

iGate had revenue of $1.3 billion in 2014, of which 79 percent came from North America.

Both Capgemini and iGate in New Jersey have offshore delivery from low-cost locations like India.

The deal will be financed through a combination of Capgemini's own cash, debt and an equity portion that will not dilute its share capital by more than 6 percent.

The boards of both companies have approved the merger. It has also been approved in writing by a majority of iGate shareholders. The transaction is expected to close in the second half of 2015, subject to customary closing conditions such as regulatory approvals.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuesservicesoutsourcingiGateMergers and acquisitionsCapgemini

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?