Public offer for the purchase of Altran shares by Capgemini Public offer for the purchase of Altran shares by Capgemini
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Opening of Capgemini’s friendly tender offer for Altran. Paul Hermelin, Chairman and CEO of the Capgemini Group

Contribute to create a global digital transformation leader for industrial and tech companies

With the data revolution and the rapid deployment of cloud, IoT 1 , Edge Computing 2 , Artificial Intelligence and 5G technologies, industrial and technology companies are entering a new era in their history.

Capgemini is a global leader in consulting, IT services and digital transformation, and Altran is the world leader in engineering and R&D services.

The combination of Capgemini’s and Altran’s complementary expertise will provide a unique offer in the market, serving the transformation of industrial and technology companies.

This great industrial project is the first major combination of two leaders in such complementary fields: Operations Technologies (engineering and R&D services) for Altran, and Information Technologies for Capgemini.

It will create a major player in the Intelligent Industry 3 , a group with revenues of €17 billion with more than 265,000 employees.

Due to its increased size and the expansion of its portfolio of offers, the combined Group will benefit from increased access to operational decision-makers from key accounts in industries (Aeronautics, Automotive, Life Sciences and Telecommunications) including R&D, Production and Supply chain.

Paul Hermelin, Chairman and Chief Executive Officer of the Capgemini Group, stated in the June 24th press release that:

“The complementarity and power of our combined business and technological expertise are truly outstanding assets. By joining forces, we are positioning ourselves as a clear strategic partner to assist our clients in taking full advantage of the revolution created by the developments of the cloud, Edge computing, IoT, Artificial Intelligence and 5G. I am delighted to welcome to Capgemini the talents and leaders of Altran, who share our beliefs and corporate culture.”

Dominique Cerutti, Chairman and Chief Executive Officer of the Altran Group, added:

“In an industry that is consolidating rapidly there is no doubt that Capgemini is the ideal partner to build together a world leader in digital transformation. This transaction will create value for our customers, and is an outstanding opportunity to showcase the talent of our teams.”

(1) IoT or Internet of Things is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers (UIDs). It refers to the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

(2) Edge computing is a distributed computing paradigm which brings computation and data storage closer to the location where it is needed.

(3) The Intelligent Industry refers to the digital transformation of industrial and tech companies

Capgemini tender offer to acquire Altran

Capgemini’s tender offer document and Altran Technologies’ response document, as approved by the French Autorité des marchés financiers (the “AMF”) on October 14, 2019 under visa no. 19-489 and visa no. 19-490, respectively, as well as the documents relating to the other information on each of the companies, are available on the website of the AMF (www.amf-france.org), and on the website of Capgemini (www.capgemini.com) or Altran Technologies (www.altran.com). Such documents may be obtained free of charge from Capgemini (11 rue de Tilsitt, 75017 Paris, France) or Altran Technologies (96 avenue Charles de Gaulle, 92200 Neuilly-sur-Seine, France), depending on whether the documents relate to Capgemini or Altran Technologies.

By tendering your shares to this friendly tender offer, you are contributing to a major industrial project: the creation of a global digital transformation leader for industrial and tech companies

An attractive price for Altran Technologies’ shareholders

The offer price per share represents 1 a premium of 30% over Altran’s volume-weighted average share price in the month preceding the announcement, and a premium of 33% over the three-month average 2 .

An offer at a fair price recommended by Altran’s Board of Directors

Altran’s Board of Directors, held on September 22, 2019, considered that Capgemini’s friendly tender offer is in the interest of Altran, its shareholders and its employees, and recommended that Altran’s shareholders tender their shares in the offer. This reasoned opinion (avis motivé) was delivered in particular after reviewing the content of the report of the independent expert appointed in accordance with the applicable regulations, Finexsi, who considers the offer price “to be fair from a financial point of view for Altran’s shareholders”.

You may also find here the Letter to Shareholders from Dominique Cerutti, Chairman and Chief Executive Officer of Altran.

Assessment of the offer price

The offer price shows a premium compared to all the valuation criteria used as the main criteria by both the four presenting banks (see graph below) and by the independent expert selected for the transaction, Finexsi:

  • The Offer Document prepared by Capgemini presents the valuation assessment of the offer price which has been prepared according to a multi-criteria analysis using the customary valuation methodologies. We hereby invite you to read all of these elements in the Offer Document prepared by Capgemini which is available here.
    It appears that the price offered of €14 per share presents a premium compared to all the methods used to value the Altran share:

  • In addition, the Response document prepared by Altran (available on its website here) includes in full the report of the independent expert, Finexsi, appointed in accordance with the regulations. The independent expert notes that the offer price of €14 per share shows a premium to all the valuation criteria used as the main criteriaand therefore on “the full value of Altran, without integrating execution risks. In particular, the expert notes that the offer price shows a premium on the DCF value of Altran based on “the very voluntaristic assumptions of the High Road 2022 plan” 3 .

Altran reference shareholder sold its shares to Capgemini at the offer price

On July 2, Capgemini acquired from a group of shareholders led by Apax Partners, the reference shareholder of Altran, a block of shares representing 11.43% of Altran’s share capital at the offer price (€14 per share).

Procedure for tendering in the Offer

You must deliver to the financial intermediary holding your securities account, an order to tender all or part of your Altran shares to the offer in accordance with the form made available by your intermediary. Your financial intermediary must have sent your contribution order to Euronext Paris, the centralizing institution, no later than the closing date of the offer. In this context, we invite you to anticipate the time required by your financial intermediary to communicate your order.

We invite you to read the documentation relating to the offer available on this site, in particular the Offer Document approved under visa no. 19-489 dated October 14, 2019 by the French financial market authority (Autorité des marchés financiers).

(1) Adjusted for €0.24 dividend detached on 27 June 2019.

(2) Periods ending on Monday, 24 June 2019 included, last day of trading before the announcement of the proposed offer made after closing of the market.

(3) DCF (Discounted Cash Flow) valuation based on the 'the High Road 2022 strategic plan, without taking into account any contingencies in its execution leading to the revenue and margin set in the plan, and then maintaining a high level of performance over the long term (13.5% EBIT margin or 13.4% excluding IBM contracts valued separately).'

Events & documents timeline

24 Jun 2019

Capgemini, a global leader in consulting, IT services and digital transformation, and Altran Technologies, a global leader in Engineering and R&D services, announced that they have entered into an agreement for exclusive negotiations whereby Capgemini is to acquire Altran, through a friendly tender offer at €14.00 per Altran share, payable in cash.  Capgemini also announced that it has signed a definitive agreement to acquire Altran shares representing 11.43% of Altran’s share capital from a group of shareholders held by Apax Partners.

The total cash consideration will amount to €3.6 billion 1 , excluding net financial debt (c. €1.4 billion). The transaction will be accretive to Capgemini’s normalized EPS by more than 15%, before synergies from the combination. In 2023, accretion is expected to exceed 25% post synergies. The agreement has been unanimously approved by the Boards of Directors of Capgemini and Altran.

2 Jul 2019

Capgemini reported that it acquired Altran shares representing 11.43% of Altran’s share capital following the settlement and delivery of the off-market acquisition of a block of shares from a group of shareholders led by Apax Partners. This transaction was the result of the definitive agreement signed and announced on June 24, 2019.

12 Aug 2019

A new milestone was reached with the announcement of the signature, on August 11, 2019, of the tender offer agreement which sets the terms and conditions of the proposed acquisition of Altran by Capgemini.

23 Sep 2019

Capgemini announced that it had filed the draft offer document with the French financial market authority AMF (Autorité des marchés financiers). As stated in Altran’s press release issued the same day, the report of the independent expert, Finexsi, appointed by the Board of Directors of Altran, has determined that the offer price is fair from a financial point of view for Altran’s shareholders. After reviewing such report, Altran’s Board of Directors issued a positive reasoned opinion (avis motivé) and determined that Capgemini’s friendly tender offer at a price of €14 per share is in the interests of Altran, its shareholders and its employees, and recommended that Altran’s shareholders tender their shares in the tender offer.

26 Sep 2019

Capgemini announced that it has received clearance from the Committee on Foreign Investment in the United States (CFIUS) for its proposed acquisition of Altran (Euronext Paris: ALT).

4 Oct 2019

Capgemini announced that it has received clearance from the competition authority in Morocco for its proposed acquisition of Altran (Euronext Paris: ALT).

14 Oct 2019

The French financial market authority AMF (Autorité des marchés financiers) declared the friendly public tender offer on Altran at a 14€ price per share compliant and on the same day granted visa n° 19-489 to Capgemini’s Offer document and visa n° 19-490 to Altran’s Response note.

15 Oct 2019

Capgemini has announced the availability of the Document detailing the information relating in particular to the legal, financial and accounting characteristics of Capgemini.

16 Oct 2019

Opening of the friendly tender offer.

(1) Based on a fully diluted number of shares, excluding treasury shares, of 256.9 million shares.

(2) Adjusted for €0.24 dividend detached on 27 June.

(3) Periods ending on Monday, 24 June 2019 included, last day of trading before the announcement of the proposed offer made after closing of the market.

(4) In view of the progress made in the process of obtaining CFIUS (Committee on Foreign Investment in the United States) authorization in the United States, Capgemini decided, as it was entitled to do by the tender offer agreement, to file its tender offer before obtaining such authorization. The tender offer will not be subject to obtaining the CFIUS authorization.

(5) Capgemini reserves the right to waive such condition in accordance with applicable laws, in which case the caducity threshold (seuil de caducité) as provided by applicable laws, i.e. 50% of the share capital or voting rights (on a non-diluted basis), will still apply.

This transaction fits with the strategic plan, in three ways:

  • It merges two leaders in complementary areas of technology that, with the advent of digital, are converging: Altran Technologies in operations technologies and Capgemini in information technologies;
  • It strengthens leadership in the high growth area of engineering and R&D services;
  • It creates a world leader in "intelligent industry", a group uniquely able to help manufacturers in their digital transformation.

The combination will create a group with €17 billion in revenue and more than 265,000 employees. The new entities will enjoy a unique competitive position in particularly attractive segments.

This is an all-cash offer by which Capgemini is irrevocably offering Altran shareholders to buy all of their Altran shares at €14.00 per share.

Altran's Board of Directors, by unanimity of the votes cast, considered that the proposed offer is in line with the interests of Altran, its shareholders and its employees and decided to issue a favorable opinion on the proposed offer and recommended to Altran shareholders that they tender their shares to the offer. This reasoned opinion is based inter aliaon an analysis of Capgemini's expressed intentions, the conclusions of the report of the independent expert, and the analysis and recommendation of the committee of independent directors set up by Altran's Board of Directors in the context of the offer.

The offer is for all shares of Altran stock not owned by Capgemini. To the best of Altran’s knowledge as at the date of the Response Document, the maximum number of Altran shares targeted by the offer is 230,048,025.

You will need to give an order to the financial intermediary acting as account holder to tender all or some of your Altran shares, using the form provided by the intermediary. Your financial intermediary must forward your tender order to Euronext Paris, the centralizing agent, no later than the day of the closing of the offer. In this regard, we urge you to factor in the time necessary for your financial intermediary to transmit your order.

Shares held in "pure" registered form in the account register of the Company, which are kept by Société Générale Securities Services, must be held in "administrative" registered form in order to be tendered, unless the shareholder has previously requested they be converted to bearer form shares (unless otherwise specified by the registrar). This procedure takes a few days. It is important to note that shareholders who expressly request conversion to bearer form would lose the benefits related to owning shares in registered form should the offer not be successful.

 

No commission will be paid by Capgemini to the financial intermediaries through which shareholders tender their shares.

Tenders of Altran’s ADRs (American Depositary Receipts) will not be accepted in this offer, or in the re-opened offer (if applicable). Owners of Altran ADRs will be required to first exchange them for Altran shares, which can then be tendered in the offer or the re-opened offer (if applicable). We urge you to contact your financial intermediary or Bank of New York Mellon, the custodian of the ADR program (Tel: +1 212 815-2231 / 2783 / 2721 or +353 1 900 3466 / 3465 / 3462) in relation to the cancellation of Altran’s ADRs.

Under this offer, or a possible re-opened offer, Capgemini will bear the brokerage fees and the related VAT incurred by the shareholder who would tender their shares in the offer or the re-opened offer, in an amount of up to 0.2% (excluding taxes) of the amount of the order with a cap equal to €100 (all taxes included) per case. Shareholders will not be reimbursed for any costs should the offer not be successful, for any reason.

 

Payment of the aforementioned costs will be implemented by Euronext Paris on behalf of Capgemini via financial intermediaries.

Capgemini's offer document dated October 14, 2019, section 2.16 in particular, contains more information on this subject; it is up to you to contact your tax advisor to study the implications in your personal case, if necessary.

Due to pending court actions against the clearance decision of the AMF on the tender offer, the tentative timetable included in the offer document of Capgemini is no longer applicable.  Closing date of the tender offer may now be postponed until April 2020 at the latest.  The definitive closing date will be set by the AMF in due course.

The outcome of the offer will be made public by the AMF, which normally has nine trading days from the closing of the offer to publish the results.

Should the outcome of the offer be positive, payment will be made a few days after the publication of the resultsof the offer, on a schedule which will be published by Euronext.

The offer will be null and void if at its closing date Capgemini does not hold a number of shares representing a fraction of Altran's share capital or voting rights greater than 50%. Whether this threshold has been reached will not be known until the AMF publishes the results of the offer.

 

Capgemini also reserves the option, until the publication by the AMF of the final result of the offer and before any re-opening, to waive the offer should the threshold of 50.10 % of Altran's share capital and voting rights, on a fully diluted basis, not be reached, taking into account the loss of double voting rights for the tendered shares.

 

If the offer is successful, it will automatically be reopened within ten trading days after publication of the final results of the offer, on terms identical to those of the original offer. The AMF will publish the timetable for the reopening of the offer, which will last at least ten trading days.

Capgemini has now obtained all the required regulatory clearances, including from the Committee on Foreign Investment in the United States (CFIUS), and from the antitrust authorities in India, the United States, Morocco and the European Commission.