Bain Capital Considers Acquisition of Struggling French Tech Giant Atos

Bain Capital considers acquiring French digital services company Atos, which faces a Friday deadline to secure refinancing offers for its €4.9 billion net debt. The French government has made a provisional offer to acquire Atos's Big Data and Security business, valued at €700 million to €1 billion.

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Mahnoor Jehangir
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Bain Capital Considers Acquisition of Struggling French Tech Giant Atos

Bain Capital Considers Acquisition of Struggling French Tech Giant Atos

American private equity firm Bain Capital is considering acquiring French digital services company Atos, which has been struggling with financial difficulties in recent years. The potential acquisition comes as Atos faces a deadline of Friday evening to secure refinancing offers for its €4.9 billion net debt, with a market capitalization of only €225 million.

Why this matters: The fate of Atos has significant implications for France's digital sovereignty and its ability to compete on the international stage. The acquisition by a foreign buyer could also raise concerns about the security of sensitive French assets, such as nuclear codes.

The French government, led by President Emmanuel Macron, has stepped in with a provisional offer to acquire approximately two-thirds of Atos's Big Data and Security (BDS) business, which manages France's nuclear codes. The acquisition, valued at an enterprise value of between €700 million and €1 billion, accounts for roughly 10% of Atos's total revenue.

French Economy Minister Bruno Le Maire emphasized the government's desire for other industrial groups to join its offer, stating, "The government wants other industrial groups to join its offer." The French Treasury's valuation implies a price of almost 15 times this year's operating profit, which some analysts consider steep for a struggling company like Atos.

The government's move is seen as a strategic effort to prevent the sale of Atos's defence and security business to a foreign buyer, a concern that has been voiced by French officials for months. Bain Capital's interest in Atos's assets was reported by French newspaper Les Echos, which described the American firm as being "very closely" interested.

In addition to Bain Capital, Czech businessman Daniel Kretinsky is also expected to submit a bid for Atos, according to BFM Business. The involvement of multiple interested parties highlights the strategic importance of Atos's assets, particularly its BDS division.

Atos, once a thriving tech giant, has seen its share price plummet by a staggering 97% over the last four years. The company's financial woes have prompted it to seek restructuring of its significant debt burden. While the French government's investment may help Atos's creditors in the short term, some analysts question the long-term financial viability of the acquisition.

Deadline for refinancing offers approaches, the fate of Atos hangs in the balance. The potential acquisition by Bain Capital or other interested parties could mark a significant turning point for the French tech industry, with far-reaching implications for France's digital sovereignty and its ability to compete on the international stage.

Key Takeaways

  • Bain Capital considers acquiring French digital services company Atos.
  • Atos faces €4.9 billion net debt and Friday deadline for refinancing offers.
  • French government offers to acquire 2/3 of Atos's Big Data and Security business.
  • Other bidders, including Czech businessman Daniel Kretinsky, may submit offers.
  • Acquisition outcome impacts France's digital sovereignty and international competitiveness.