Recommended Public Exchange Offer by Cap Gemini for Transiciel
20 October 2003
Cap Gemini today announced the filing of a public exchange offer to acquire all of the outstanding share capital of Transiciel. The offer has been recommended by the Board of Directors of Transiciel, as well as by its principal shareholder, Mr. Georges Cohen, who has agreed to tender his entire shareholding to the offer.
In acquiring Transiciel, Cap Gemini is furthering the implementation of its development strategy in its core businesses by:
- strengthening its position in the Local Professional Services market, which represents 20% of the IT services market in Europe;
- complementing Sogeti’s geographic footprint in the Benelux countries, as well as reinforcing its presence in France and Spain;
- extending the range of its service offering with the addition of Transiciel’s “R & D outsourcing” service line.
Upon completion of the offer, Sogeti/Transiciel will boast over 13,000 employees across 9 countries (including 1,200 in the United States) with combined pro forma revenues in 2002 in excess of €1.1bn.
The new grouping, headed by Messrs. Georges Cohen and Luc-Francois Salvador (Sogeti’s currrent Managing Director), will become the European reference in the Local Professional Services market and will be well positioned to capitalise on the expected recovery in the IT services sector.
Paul Hermelin, Chief Executive of Cap Gemini Ernst & Young Group, commented: “This acquisition is in line with the Group’s strategy. Cap Gemini wishes to be in a position to offer its clients local professional services as well as global solutions adapted to meet their specific requirements. The shared principles in organisational structure and management systems are a decisive advantage for this immediately operational new group. Its growth and high margin potential should benefit the entire Cap Gemini Ernst & Young Group. We have set ambitious performance targets for the next two years for Georges Cohen and Luc-Francois Salvador and I am wholly confident that they will meet and even surpass them.”
Key terms of the Offer
The transaction will take the form of a public exchange offer whereby Transiciel shareholders are invited by Cap Gemini to tender and exchange their shares under either of the following options:
Option 1: an exchange ratio of 1 new Cap Gemini share issued for every 3 Transiciel shares;
Option 2: an exchange ratio of 5 Cap Gemini shares to be issued, plus 16 warrants giving entitlement for up to 1 new Cap Gemini share, for 16 Transiciel shares;
Option 2 includes an earn-out mechanism which would allow Transiciel shareholders to receive additional Cap Gemini shares subject to the Sogeti/Transiciel grouping attaining certain operating performance targets over the next two years.
Transiciel shareholders will be able to choose either option
or any combination of the two.
The number of additional Cap Gemini shares which may be issued
under Option 2 is capped at 20% of the initial number of shares
issued to Transiciel shareholders having tendered their shares
under Option 2.
On the basis of an exchange ratio of 3 Transiciel shares for 1 Cap Gemini share and on the basis of Cap Gemini’s closing share price of €38.87 on 17th October 2003, the offer values each Transiciel share at €12.96, a premium of 23.1% over Transiciel’s one-month average share price.
The offer is subject only to Cap Gemini shareholder approval,
as well as to an acceptance threshold of 66.67% of Transiciel’s
shares and voting rights existing as of the close of the tender
offer period.This offer is presented by Lazard Frères
Banque, financial advisor to Cap Gemini, and by Société
Générale, co-sponsoring banker. Rothschild &
Cie acted as Transiciel’s financial advisor.
Indicative timetable for the offer
Cap Gemini’s offer was filed with the Paris stock exchange authorities on October 20, 2003. Subject to all required approvals, the transaction is expected to be completed by the end of 2003.
* * *
Cap Gemini
The Cap Gemini Ernst & Young Group, of which Cap Gemini is the parent company, is one of the world leaders in consulting, IT services and outsourcing, and reported 2002 revenues over 7 billion euros, with total staff of around 50,000.
Transiciel
Transiciel is a European IT services and Engineering Company offering a multi-specialist package for large businesses, based on three complementary business segments: R & D Outsourcing, Integration of Management Systems and Insourcing & Administration of Systems and Networks.The press release referred to under Section 6 of COB regulation 2002-04 has been issued and is available on the COB website (www.cob.fr) and on the Cap Gemini Ernst & Young website (www.cgey.com).
According to Section 7 of COB regulation n°2002-04, this press release has been submitted to the COB prior to distribution.
* * *
