The French based IT solutions company Capgemini announced on Monday that they are acquiring US based IT company iGate for a staggering $4 billion cash deal to make North America their biggest market in sales.
The deal was confirmed on Monday by Capgemini officials, iGate has a revenue of $1.3 billion and a 19% operating margin with a growth in double digits. Capgemini has a market capitalization of $14 billion on Monday and would pay $48 for an iGate share.
Capgemini said it had the backing of shareholders representing 54 per cent of iGate’s share capital and that the deal would enhance earnings by 12 percent in 2016 and 16 per cent in 2017.
The deal will help Capgemini increase their share in North America by 30 percent and will increase the revenue of the company by one third.
iGate has about 80 per cent of its operations in North America, which Capgemini said is “by far the largest and most innovative technology and services market in the world”.
The deal will enhance Capgemini’s market share and increase business development and infrastructure in America, thus adding new clients like General Electric and Royal Bank of Canada in process.