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August 1, 2023

Atos plans €2bn sale of its Tech Foundations IT infrastructure business to billionaire investor

The deal will leave Atos free to focus on its more profitable cybersecurity activities, if it is approved by shareholders.

By Matthew Gooding

Atos is set to sell its Tech Foundations legacy IT infrastructure business to a Czech billionaire in a deal worth €2bn. The struggling IT services provider has been restructuring its operations for the past year in a bid to stem heavy losses, and says the sale will allow it to focus on Eviden, its cybersecurity and data arm.

Atos is selling its Tech Foundations business unit. (Photo by T. Schneider/Shutterstock)

Energy magnate Daniel Kretinsky is set to purchase Tech Foundations through his EP Equity Investment (EPEI) vehicle. The sale has been approved by the Atos board of directors, and will now be put to shareholders at an EGM to be held in the fourth quarter of this year, a statement released on Tuesday morning said.

Seen as a business of national strategic importance in France, where it is based, Atos holds key public sector contracts on the other side of the channel, and is a major IT supplier to the UK government, as well as other clients in the private and public sectors.

Atos to sell Tech Foundations and focus on Eviden

The agreed deal for Tech Foundations will see Atos receive €100m from EPEI and, importantly, relieve the loss-making business of liabilities worth €1.9bn, the statement said. Following the sale, Atos also plans to strengthen its balance sheet with a €900m share issue, in which EPEI will participate.

Once the sale is complete, Atos is expected to be renamed Eviden SE, though the Atos brand will live on as a parent company through which Eviden will be listed on the Paris Stock Exchange.

Last week, Atos reported an operating loss of €434m for the first half of 2023, with revenue from Tech Foundations declining 0.1%. Eviden’s revenue, meanwhile, grew 7% in the same time period.

Kretinsky made his fortune in the energy industry and is the majority owner of Energetický, the largest energy company in central Europe. He is currently building his portfolio in France, where Atos is based, having also reportedly taken an interest in acquiring the supermarket chain Casino.

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What does the future hold for Atos and Eviden?

Atos announced its plan to split its business in 2022 after years of financial problems. Since then it has been exploring new avenues for financing both operations, with Airbus rumoured to have been interested in taking a 30% stake in Eviden earlier this year, though talks between the two companies reportedly came to nothing.

The split mimics IBM’s decision to spin off its legacy infrastructure business into a new stand-alone company, Kyndryl, so that it could focus on cloud products. Atos is hoping the continued growth of Eviden will help it return to profitability, and its share price jumped 6% on news of the potential sale of Tech Foundations.

In a joint statement, the Atos leadership team – Nourdine Bihmane, Diane Galbe and Philippe Oliva – said: “Today we are announcing a critical milestone in delivering the in-depth transformation of the group. Following the sale of Tech Foundations, Atos would become Eviden, a global leader in digital transformation with full strategic flexibility and enhanced capital structure to further accelerate its development.”

The statement added that Tech Foundations stakeholders would “benefit from the backing and long-term vision of EPEI to fully implement its transformation and repositioning”. They added: “We are delighted with today’s announcement and are really looking forward to writing the next chapter of both Tech Foundations and Eviden with our employees, customers and all our stakeholders.”

Read more: Microsoft Azure and Google Cloud reveal AI hardware spending

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