French IT firm Atos has entered negotiations with the government over the potential acquisition of its advanced computing activities for an enterprise value of 500 million euros ($524 million), it said on Monday.
Atos, which secures communications for the French military and secret services and manufactures servers to make supercomputers, is undergoing a restructuring to tackle its large debt. The government has for months been making a concerted effort to reach a deal to retain control over Atos’ strategic technology assets within the country.
The target is to have a share purchase agreement signed by May 31, when an exclusivity period ends, Atos said in a statement, adding that an initial payment of 150 million euros would be made when the deal was signed.
The offer could potentially be increased to 625 million euros including earn-outs, it added.
Atos – once seen as one of Europe’s champions in the software and technology sector – has been teetering on the brink of financial collapse in recent months, and its recovery hinges on the implementation of its accelerated safeguard plan.
“It is the role of the French State to guarantee, as a shareholder when it is justified, the perennity and development of the industrial activities that are most strategic for our sovereignty,” Finance Minister Antoine Armand said on Monday.
Advanced Computing, Critical Systems and Cyber Products are part of Atos’ cybersecurity unit BDS. They employ about 4,000 people and generate about 900 million euros of annual sales, a Finance Ministry official told Reuters in April.
Atos said it would also launch a formal sale process for Critical Systems and Cyber Products.
“The French State is back in the running, with an offer suggesting that the sale price for all 3 assets will be higher than the 700 million initially put on the table,” said an analyst who asked not to be named.
The parliament’s Finance Commission said earlier this month it had adopted an amendment that could lead to the nationalisation of Atos.
Taking in to account the sale of the computing unit, Atos said it expects its 2027 financial leverage to be between 1.8 and 2.1 times core earnings. There will be no impact on the refinancing plan, a company spokesperson said.
The value of Atos’ shares has plummeted in recent years amid the mounting troubles and restructuring efforts. They rose more than 160% on Monday to 41 euro cents as of 1047 GMT.
Source: Reuters.com