Atos has made an unsolicited bid to buy Gemalto of the Netherlands, the French company was forced to go public on Tuesday, with no official answer from Gemalto.
Atos can afford the €46 per share offer price. The question is whether Gemalto shareholders can demand more. No, is the answer. Atos felt it had to out itself as the bidder after Gemalto’s shares surged 5% the previous day, according to the FT.
One can see the attraction. Atos and Gemalto overlap in areas such as data protection, artificial intelligence and secure electronic payments. Both are increasingly automating the IT consultancy services they provide. The two also have strengths in the US market and together would get more than a fifth of pro-forma revenues from North America.
Another factor will have caught chief executive Thierry Breton’s eye. Gemalto’s share price has had a terrible run over the past four years, down 64% from its peak. Its price-to-forward-earnings multiple has fallen to a near five-year low. Financially, the deal makes sense, too.
Atos pays all cash, and can afford to do so. Its balance sheet today has no net debt. This purchase would move net debt to just over 1.6 times its earnings before interest, tax, depreciation and amortisation — not a lot.