The deal ends speculation that the Paris, France-based company would exit the region and offload its North American operations wholesale. Capgemini’s CFO, Nicolas Dufourcq went on the record that he had no plans to withdraw completely from the US or from the healthcare sector. The company said that the deal, which it expects to complete in 60 to 90 days, is part of the 400m euros ($524m) asset disposal strategic program it first announced in September 2004.
Capgemini is only selling its project and consulting healthcare business, transferring around 600 employees to Accenture, while it will retain its outsourcing contracts in the sector and its federal public sector health consulting capabilities, both of which it described as global strategic areas.
The fragmented, stand-alone nature of the US private health provider market provided fewer synergies for the national public health care systems in Europe, where we continue to be a market leader around high-growth areas such as electronic health records, said CEO Paul Hermelin.
Accenture said that the deal will increase the number of employees it has servicing health and life sciences clients to over 4,600. The sector generated over $800m of its net revenues in 2004.
Capgemini has described North America as its number one priority for 2005, and it expects a recovery in the second half of 2005, with peer-level performance next year. In 2004 it made an operating loss of 64m euros ($84m) in the region on sales of 1.4bn euros ($1.8bn). The company as a whole is aiming for an operating margin of 3% for 2005, and whether or not it can exceed this will depend on how quickly it can turnaround it operations in the region.
The company will announce details of its recovery plans for North America on May 4, along with its financials for the first quarter of 2005. So far investors have reacted positively to what is Pierre Danon’s first major decision since moving from BT to become COO in November 2004. Shares increased 3.5%, boosting its market cap to 3.53bn euros ($4.27bn).
