Atos deal to sell its legacy service business falls through

French IT services company Atos has put an end to its attempts to sell its ailing legacy managed infrastructure services business after failing to reach an agreement with a prospective buyer, and will now have to glue the two halves of its business back together.

Exclusive talks with EP Equity Investment over the sale of the Tech Foundations business ended after the two parties failed to agree on deal terms and pricing. “We could not reach a mutually satisfactory agreement,” Atos group CEO Paul Saleh said in a conference call with press and analysts Wednesday. Neither party will pay a cancellation fee, and their only obligations will be to keep details of their negotiations secret.

Atos revealed the plan to split itself in two last year, after its larger rival, IBM, spun out its own managed infrastructure services business to form Kyndryl in November 2021.

He hasn’t ruled out looking for another buyer, though, saying that it “we will continue to consider strategic options for Atos for all of our assets in a way that best serves the interest of our customers, employees, and shareholders.”

Meanwhile, Atos will continue to operate both halves of the company, Tech Foundations and Eviden, as separate entities with a coordinated go-to-market strategy, he said.

Eviden includes the company’s transformation acceleration, smart platforms, cloud, digital security, advanced computing and net zero transformation activities. The legacy Tech Foundations business manages hybrid cloud and infrastructure, digital workplace, digital business platforms, technology advisory and customized services.

Saleh announced preliminary financial results for 2023 during the conference call. Group revenue for 2023 totaled €10.7 billion (about $11.6 billion), up 0.4% year on year and in line with the company’s previous forecasts. Tech Foundations accounted for €5.6 billion of that, down 1.7% year on year, a situation he characterized as a “managed decrease.” Revenue from the Eviden half of the business rose 2.9% to €5.1 billion, growing a little faster than in the previous year.

Atos is delaying announcing its full results until March 20, as its auditors need additional time to review an independent business review report and complete their audit of non-cash goodwill impairment charges.

Saleh said he will provide more details of the company’s plans to coordinate the activities of Eviden and Tech Foundations at that time.