Altran acquires engineering and design firm Aricent for $2 bn cash
The deal will close off in the first quarter of 2018 and the new entity post the buy out will emerge as a global leader in ER&D services, a segment which is expected to touch €220 billion by the year 2020, said the company.
Incepted in the year 1991 by KV Ramani in New Delhi as Hughes Software Systems (HSS), Aricent has witnessed numerous buy outs. In the year 2004, US headquartered Flextronics acquired HSS and formed Flextronics Software Systems and collaborated it with Future Software Communications in the city Chennai.
After two year, KKR acquired it for an estimated value of $900 million which was the biggest buy out of a private entity that time in India. The company was renamed as Aricent in the year 2011.
Based in California, Aricent offers engineering and design services to enable its clients get to market faster. The company has a workforce of 10,500 employees of which 8,500 are based out of India.
"Through this acquisition, Altran will be uniquely positioned to offer an unmatched value proposition to its clients and outpace competition. Altran will now have a superior scale and scope, and now masters all four critical criteria necessary to lead the industry: a global presence and reach, leadership across most industries, strong expertise in key technology domains and a superior global delivery supply chain." said Dominique Cerutti, Chairman & CEO, Altran Group.
"This transaction acts as a catalyst allowing us to achieve Altran 2020. Ignition strategic goals as early as 2018. Current and future shareholders will benefit from this value-enhancing acquisition, delivering EPS accretion immediately while preserving our robust financial profile." added Cerutti.
"For 26 years, Aricent has positioned itself as a leading global design and engineering company. In doing so, We are well-positioned to merge our engineering and design capabilities with those of Altran to create a global leader in R&D engineering services with enormous scale, unparalleled capability, and unique and differentiated innovation" said CEO of Aricent, Frank Kern.
"Altran has obtained a full financing package for the transaction, which is intended to be refinanced in part through a €750 million rights issue, subject to shareholders' approval and market conditions. Altran shareholders Apax Partners and the founders, who respectively hold 8.4% and 2.8% of the share capital, together representing 16.6% of the voting rights, have confirmed their full support of the transaction" said the company in a statement.