Atos is in the process of splitting up and appears to have found a buyer for its legacy division. This would put the company’s transformation on a trajectory similar to that of IBM’s 2021 spin-off of Kyndryl.
The French IT provider came up with Eviden, a subsidiary that held together security and big data services, among other things, in the middle of last year. There is now an offer of 2 billion euros for Atos Tech Foundations, which provides services such as data centers and outsourcing.
The intended buyer is EP Equity Investment (EPEI) and would be paying 100 million euros combined with taking on 1.9 billion euros of debt the division is sitting on. An attractive proposal, it looks like. Behind EPEI is Czech businessman Daniel Křetínský, who is a major shareholder in the English football club West Ham United and Dutch postal service PostNL.
Calmer waters
Atos announced in June 2022 that it planned to split up. Its explanation was that some legacy services had very different “market dynamics” than the potentially more profitable digital, security and big data division. It admitted at the time that the company’s top management role would shrink due to the split, but it would immediately create two “leaders” in their respective markets.
Previous attempts to sell Atos units have often faced obstacles. For example, in early 2022, Thales tried to acquire Atos’ cybersecurity division (BDS) but was unsuccessful. Given the company’s longstanding ties to the French government (including the Ministry of Defense), such an acquisition would not have been easily approved either. However, hiving off the less lucrative legacy services seems a lot less controversial.
It is reminiscent of the split of the Managed Infrastructure services that IBM provided. It set up Kyndryl in 2021 to pry IBM loose from this legacy market, which was apparently difficult to manage in conjunction with its other IT services and hybrid cloud initiatives.
Exclusive negotiations
The deal will still have to be approved by the Atos board, although it is currently negotiating exclusively with EPEI. The remaining part of Atos is still expected to put shares up for sale to raise cash. The Register reports that Atos may be renamed Eviden SE in early 2024, after the sale would be complete.
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