Skip to content
Tiatra, LLCTiatra, LLC
Tiatra, LLC
Information Technology Solutions for Washington, DC Government Agencies
  • Home
  • About Us
  • Services
    • IT Engineering and Support
    • Software Development
    • Information Assurance and Testing
    • Project and Program Management
  • Clients & Partners
  • Careers
  • News
  • Contact
 
  • Home
  • About Us
  • Services
    • IT Engineering and Support
    • Software Development
    • Information Assurance and Testing
    • Project and Program Management
  • Clients & Partners
  • Careers
  • News
  • Contact

IT services company Atos finalizes plan for IBM-style split

IT services company Atos has found a buyer for its legacy managed infrastructure services business as it prepares for an IBM-style split between faster- and slower-growing activities.

The deal will spell an end to the current one-stop shop for IT services that it offers its enterprise customers, but will free up capital and cash-flow for it to invest in more modern activities: digital transformation, smart digital platforms, cloud technology, cybersecurity, high-performance computing and AI.

IBM spun out its legacy managed infrastructure services business as a new company, Kyndryl, in November 2021, seeking to become a faster-moving and more profitable company focused on modern technologies.

That strategy appealed to the management of Atos, a major European player in the IT services market with a history almost as long as IBM’s, and in July 2022 Atos announced its own plan to split, spinning off its less profitable activities including data centers and hosting; the digital workplace; unified communication and collaboration; and business process outsourcing.

Atos had planned to divide into two publicly listed companies, but on August 1 announced it is taking a different route.

It is close to selling its legacy business, known internally as Tech Foundations, to EP Equity Investment, a Luxembourg-based firm controlled by Czech billionaire Daniel Kretinsky. EPEI is expected to pay €100 million (about $110 million) for business, provisionally named TFCo during the transition, and to take on €1.9 billion of Atos’ corporate debt, thus valuing the deal at around €2 billion.

New name

Kretinsky will also take over the Atos brand, which the legacy business unit will have exclusive rights to. The parent company, meanwhile, is adopting the name Eviden, a variant of the Evidian brand previously used for its security products.

EPEI has little experience managing technology companies. The closest thing in its portfolio is a stake in Aareal Group, a bank that has an ERP software subsidiary, Aareaon, which provides digital solutions for the European property industry. Its other investments include minority stakes in national postal services, supermarket chains, consumer electronics stores and a French TV network.

Atos is looking for a clean break between the two halves of its business, and has spent the last year allocating staff to one part or the other.

“There are no synergies today between both divisions,” Nourdine Bihmane, Atos co-CEO in charge of Tech Foundations, said in a conference call to discuss the EPEI deal. “We can create a lot of value through our focus on the most attractive markets.”

Bihmane also announced the appointment of a new group CFO, Paul Saleh, a veteran of Sprint Nextel, CSC and DXC Technology.

Saleh explained how Eviden plans to raise capital to develop its business after the Tech Foundations sale. The company is planning a new share issue to raise €900 million in fresh capital, €218 million of which will come from EPEI, and also hopes to raise another €400 million from the sale of non-core assets. It has already raised €700 million this way over the last year.

Declining market share

Philippe Oliva, Atos co-CEO in charge of Eviden, outlined how the company plans use that capital, growing revenue by 7% annually through 2026. That’s ambitious given Eviden’s recent performance, but somewhat underwhelming given the much higher growth rate of 11.7% that the company forecasts for the total addressable market it in which it operates.

In effect, Oliva is planning on losing market share.

As for that recent performance, Atos reported financial results for the first half of 2023 last month.

Revenue from Tech Foundations totaled €2.92 billion for the half-year, down 3.3% from €3.02 billion a year earlier. Eviden’s revenue for the half year was €2.63 billion, up 3.5% from €2.54 billion. It also had the healthier operating margin, 5.3% compared to Tech Foundations’ 2.5%.

Overall, the company’s revenue for the half year remained almost flat at €5.55 billion; its net loss increased slightly to €600 million, from €503 million a year earlier.

Next steps

Atos still needs shareholder approval for the sale of TFCo to EPEI, for which it will call an extraordinary general meeting in the fourth quarter, and clearance from its banks and regulators, which it expects to receive in early 2024.

Only then will Eviden be able to go ahead with its new share issue to raise capital to develop its business, executives said.

Saleh, drawing on his prior experience as CFO at CSC and DXC, explained that the Eviden’s digital and cybersecurity activities would offer a relatively quick return on that working capital, while expanding the high-performance computing business will involve tying up infrastructure investments over longer periods.

Technology Industry
Read More from This Article: IT services company Atos finalizes plan for IBM-style split
Source: News

Category: NewsAugust 1, 2023
Tags: art

Post navigation

PreviousPrevious post:How innovative modular UPSs support digital transformation at edge computing sitesNextNext post:This is the easiest AI strategy decision you’ll ever make

Related posts

Barb Wixom and MIT CISR on managing data like a product
May 30, 2025
Avery Dennison takes culture-first approach to AI transformation
May 30, 2025
The agentic AI assist Stanford University cancer care staff needed
May 30, 2025
Los desafíos de la era de la ‘IA en todas partes’, a fondo en Data & AI Summit 2025
May 30, 2025
“AI 비서가 팀 단위로 지원하는 효과”···퍼플렉시티, AI 프로젝트 10분 완성 도구 ‘랩스’ 출시
May 30, 2025
“ROI는 어디에?” AI 도입을 재고하게 만드는 실패 사례
May 30, 2025
Recent Posts
  • Barb Wixom and MIT CISR on managing data like a product
  • Avery Dennison takes culture-first approach to AI transformation
  • The agentic AI assist Stanford University cancer care staff needed
  • Los desafíos de la era de la ‘IA en todas partes’, a fondo en Data & AI Summit 2025
  • “AI 비서가 팀 단위로 지원하는 효과”···퍼플렉시티, AI 프로젝트 10분 완성 도구 ‘랩스’ 출시
Recent Comments
    Archives
    • May 2025
    • April 2025
    • March 2025
    • February 2025
    • January 2025
    • December 2024
    • November 2024
    • October 2024
    • September 2024
    • August 2024
    • July 2024
    • June 2024
    • May 2024
    • April 2024
    • March 2024
    • February 2024
    • January 2024
    • December 2023
    • November 2023
    • October 2023
    • September 2023
    • August 2023
    • July 2023
    • June 2023
    • May 2023
    • April 2023
    • March 2023
    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • January 2018
    • December 2017
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • June 2017
    • May 2017
    • April 2017
    • March 2017
    • February 2017
    • January 2017
    Categories
    • News
    Meta
    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org
    Tiatra LLC.

    Tiatra, LLC, based in the Washington, DC metropolitan area, proudly serves federal government agencies, organizations that work with the government and other commercial businesses and organizations. Tiatra specializes in a broad range of information technology (IT) development and management services incorporating solid engineering, attention to client needs, and meeting or exceeding any security parameters required. Our small yet innovative company is structured with a full complement of the necessary technical experts, working with hands-on management, to provide a high level of service and competitive pricing for your systems and engineering requirements.

    Find us on:

    FacebookTwitterLinkedin

    Submitclear

    Tiatra, LLC
    Copyright 2016. All rights reserved.