Airbus has begun preliminary talks with Atos over the acquisition of the French tech giant’s cybersecurity division BDS, which could be worth up to €1.8 billion. The acquisition will provide much-needed financial support to Atos, which is currently undergoing a major restructuring plan while also working to repay high levels of debt.
Talks between the two companies were confirmed on Wednesday morning, with Atos also confirming that the proposed €400 million sale of its Tech Foundations business to private equity fund EPEI is still pending, despite being announced five months ago. He also clarified that no decision has been made yet. If EPEI acquires Tech Foundations, it is unlikely to make a previously planned investment in Eviden, another Atos business, the company said in a statement.
Atos is considered a company of national strategic importance in France and has major public sector contracts across the Channel. The company is a major IT supplier to the UK government and other customers in the private and public sectors, but its revenue has fallen sharply in recent years as companies choose other providers as they move their IT operations to the cloud.
Airbus in talks to acquire BDS from Atos
BDS is Atos’ cybersecurity product and currently resides within Eviden. Eviden was founded last year when Atos split into his two separate businesses, Eviden and Tech Foundations. The former will manage the company’s big data, cloud and security products, while the latter will oversee traditional contracts that provide on-premises IT infrastructure.
The split was supposed to allow Atos to focus on Eviden, which it sees as a major growth opportunity, but the company continues to struggle to make ends meet. In November, it was revealed that further asset sales may be required to meet future debt repayments, in particular a €1.5 billion loan due to mature in January 2025, but today’s statement has confirmed that it is in talks with Airbus and another company about the future of BDS.
The company’s board of directors believes that “among the various possible divestitures, the sale of BDS will be an important element and will preserve the strategic interests of the remaining activities.” The statement said:Athos added, “We have received two letters expressing non-legally binding interest in BDS operations, one of which concerns only part of the BDS boundary.”
The identity of the second bidder was not disclosed, but the company said it “will begin the due diligence phase with Airbus, and that an indicative offer of an enterprise value of between €1.5 billion and €1.8 billion for Airbus has been rejected.” “It’s about the whole BDS border.”
Last year, Airbus expressed interest in acquiring 30% of Eviden, but negotiations with Atos at the time failed.
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Balance sold by Tech Foundations to EPEI
Meanwhile, Atos said talks continue over the Tech Foundation and EPEI, an investment vehicle owned by billionaire energy tycoon Daniel Krechinsky. These focus on “the consideration to be paid, the structure of the transaction, and the transfer of a significant portion of Tech Foundations’ debt,” the company said. “As with any negotiation, there is no certainty that an agreement will be reached in this negotiation.”
It added that EPEI’s planned investment in Eviden, which would have strengthened the company’s balance sheet as part of a broader share issue worth 900 million euros, may not be implemented. “Due to changes in market conditions and reactions, we have had to scale back our originally planned scale,” the statement said. “Furthermore, the company is reviewing with EPEI the legal and financial conditions under which EPEI may be released, in whole or in part, from its commitment to participate in the capital increase.”
If both sales are completed, Atos’ services portfolio could be significantly reduced and its profitability improved. The company’s revenue for the first half of fiscal 2023 decreased slightly to 5.54 billion euros from 5.56 billion euros in the same period of 2022. Operating loss widened to 434 million euros from 294 million euros in the previous year, due in part to related costs. To restructuring.
Board turmoil has also hampered Atos’ progress, with the appointment of new CEO Yves Bernard in October and Jean-Pierre Moutier replacing chairman Bertrand Meunier, who supported the sale of Tech Foundations. He took office.
In today’s update, the company added that it “does not preclude the sale of additional assets, particularly if the transaction with EPEI does not proceed.”