Narayan AmmachchiFrench IT consulting and outsourcing company Capgemini has announced a bid to acquire the North American operations of U.S. technology firm Ciber for $50 million.
If successful, the acquisition will increase Capgemini’s workforce by around 2,000 consultants in the United States and 1,000 in India.
The operations Capgemini intend to buy from Ciber have around $275 million in annual revenue. The transaction excludes certain liabilities of Ciber as well as its international operations.
Capgemini revealed its plans to acquire Ciber just a day after the American firm filed for bankruptcy protection under Chapter 11 of the U.S. bankruptcy code.
The outsourcing giant will integrate Ciber’s assets into its technology services unit, nicknamed Sogeti.
Considering its statement, Capgemini is eyeing Ciber’s large American clients rather than technology solutions. It is hopeful that the acquisition will increase Sogeti’s business volume by 50%. Reports say Ciber’s clients include some of the top firms in North American automotive, telecommunications, and media sectors.
Capgemini grew into a strong player in North America’s technology services market two years ago when it acquired Indian IT services firm iGate for $4 billion. Today, North America accounts for 30% of its revenue, according to French newspapers.
Ciber will help Capgemini widen its footprint in North America at little cost, but the deal has to be approved by the U.S. bankruptcy court. And it is unclear what will happen to their colleagues who remain at bankrupt Ciber, which has around 6,500 employees.
Cap Gemini has not acquired Ciber. They are bidding on it. Ciber is basically in auction for the next 30 days so another company can still purchase the company.