It seldom happens that an acquisition is being closed during an analyst event, but so it happened today – Atos completes the acquisition of Unify from Gores Group and Siemens.
So let’s take it apart in our custom style – the press release can be found here:
Bezons, January 20, 2016 Atos, an international leader in digital services, today announced that it has completed the acquisition from Gores Group and Siemens of Unify, the world number three in integrated communication solutions generating €1.2 billion annual revenue. The acquisition creates a unique integrated proposition for unified communications improving the social collaboration, digital transformation and business performance of its clients.

MyPOV – Sums it up well, as Atos’ Eric Grell made clear here in Bermuda, it’s all about for Atos to be in a good position to support business model change, namely Digital Transformation. And Atos sees Unify key in helping enterprises deal with new ways how consumers deal with enterprises, obviously on the communications side.
The transaction has been approved by employee representatives’ bodies and has received the required approvals of the regulatory and antitrust authorities in the European Union, United States, Russia and Brazil. Cash consideration for Atos was € 366 million (adjusted from working capital) to acquire 100% of Unify. Net debt was € 48 million at closing and the pension deficit was € 176 million. This leads to an Enterprise Value of € 590 million as disclosed on November 3rd, 2015 at the signing of the transaction.

MyPOV – That is probably close to record time for an acquisition of this scale, given it was only announced November 3rd 2015. But shows how all involved parties – Atos, Siemens and Gores Group wanted to move fast. Siemens and Gores Group wanted Unify off the books, and Atos wanted them on the books, and Unify wanted to move anyway. But getting employee body / worker council approval so fast is quite an achievement, considering at what (slow) speed these things can move in Europe.
As a reminder, in order to generate the expected costs savings by 2017 (€ 130 million on an annual basis), Unify is completing its current € 267 million restructuring plan. In addition, Unify is starting, as planned, its € 103 million further restructuring plan which is fully provisioned at closing. Both restructuring plans are funded by the sellers.

MyPOV – Interesting to see this paragraph as part of the press release – but a key reminder that Atos is acquiring a business that is in the midst of restructuring. What we see and hear currently in Bermuda is encouraging, but it needs to be understood that the restructuring at Unify isn’t over yet.
As of February 1st, 2016, the Services activity of Unify (c. € 0.4 billion annual revenue) is integrated in the Atos Service Line “Managed Services”.

MyPOV – Key reminder where the Unify revenue will go – from a Services perspective, which will reside in Eric Grall’s area of responsibility. It seems not be fully clear where the Unify product teams will report to at this point, but it is likely it will go to the current CTO and former Bull Executive Philip Vannier. But then other Atos owned Communications products - e.g. BlueKiwi are with Ursula Morgenstern, Head of Consulting & Systems Integration, Cloud & Enterprise. I am sure we will know soon. 

Overall MyPOV

Few industries are more affected by the move to cloud than professional services providers. Revenue streams, markets, skills etc. are all in turmoil due to the move of enterprises to less sophisticated, easier to setup and operate cloud based software. More or less all players know that they need to upgrade skills, increase global coverage and prepare themselves for the upcoming best practices and business model change. A number of player are take clearly product centric strategies – e.g. Infosys – and we count Atos by now in that category, too. Executing that strategy is full of challenges, images and branding changes, sales and marketing challenges, skills modulation – all not trivial DNA changes for a traditional services based vendor. But once embarked in the transformation, speed and execution are of the essence and Atos seems to be on a good course, with good speed. We will watch how the new Atos + Unify will unfold in the markets and with customers. Stay tuned.

For more on collaboration and communication - check out my colleagues' Alan Lepofsky blog here.