Billionaire Kretinsky to Make Biggest Tech Deal of 2023?

Atos SE, a French firm, is negotiating a $2 billion sale of its loss-making legacy operations with Czech billionaire Daniel Kretinsky. Kretinsky, well-known for his investments in the energy sector, has been expanding his European empire, including through recent purchases in France. Atos will be able to focus on its cybersecurity and cloud assets, while Kretinsky will be able to diversify his holdings. This article delves into the specifics of the possible acquisition and the consequences it could have for both parties.

Atos’s Legacy Operations

The Tech Foundations business, which provides infrastructure management services, is one of Atos’s legacy operations that has weighed down the company’s bottom line. Atos will be able to reduce its debt load and refocus on its core competencies in cybersecurity and cloud services thanks to the sale of this division to Kretinsky’s EP Equity Investment (EPEI) vehicle. Atos expects to net €100 million in cash and a reduction of €1.9 billion in liabilities due to the sale.

Daniel Kretinsky has been aggressively pursuing new business opportunities across Europe. His acquisitions in France, such as the retail chain Casino and the publishing division of Vivendi known as Editis, attest to his penchant for a wide range of industries. Kretinsky’s strategy involves buying cheap assets and turning them into successful businesses, so the possible purchase of Atos’s legacy operations makes sense.

Atos’s Turnaround Strategy Has Significantly Changed

Atos’s turnaround strategy has significantly changed with the sale of its legacy operations. The company’s restructuring strategy will change due to this new deal; previously, it had planned to split into two separate entities. Following the sale, Atos will continue to operate its Tech Foundations division under the Atos name. In contrast, the remainder of the company’s assets, including the cybersecurity division BDS and supercomputers, will be rebranded as Eviden.

Atos plans to raise 900 million euros through a share sale and the sale of its legacy operations. Atos hopes to use the funds it raises to fortify its balance sheet further and lower its leverage ratio. Kretinsky’s EPEI will reserve shares worth 180 million euros for this share sale, giving him a 7.5% stake in the newly formed entity, Eviden. BNP Paribas and JP Morgan will underwrite the remaining 720 million euros worth of shares.

Daniel Kretinsky’s possible purchase of Atos’s legacy operations has numerous ramifications for both parties. The sale will allow Atos to rededicate resources to its core cybersecurity and cloud services competencies, improving the company’s long-term prospects for growth and profitability. Atos will have more financial security as a result of debt reduction. However, this purchase will help Kretinsky expand his empire and broaden his range of investments. Atos’s legacy operations are expected to add value, which will help his investment plan in the long run.

Businesses Like Potential Acquisition News

The market has responded favorably to the potential acquisition news, increasing Atos’s share price by 8 percent. The stock price increase reflects investors’ optimism about the company’s reorganization and future prospects. The stock price of Atos has fluctuated significantly over the past few years, falling from nearly 100 euros in late 2017 to around 10 euros before the announcement of the potential sale.

Change in Leadership, Restructuring, and Possible Sale

Atos has announced a change in leadership, restructuring, and possible sale of its legacy operations. After a year in the role, CFO Nathalie Senechault is leaving, and her replacement, Paul Saleh, has already started. This change in management is in keeping with Atos’s strategic realignment and highlights the firm’s dedication to being a catalyst for constructive change and expansion.

Conclusion

In conclusion, Daniel Kretinsky, a Czech billionaire, is in talks to buy Atos’s legacy operations, which would be a huge step for both companies. The sale will help Atos focus on its core competencies—cybersecurity and cloud services—while also lowering its debt and strengthening its financial position. But Kretinsky isn’t stopping there; he’s adding valuable assets to his investment portfolio through shrewd mergers and acquisitions. The market has received the news well, suggesting that investors are optimistic about Atos’s future. Atos and Kretinsky both stand to benefit from the terms of this agreement.

First reported on Reuters

Frequently Asked Questions

What is Atos selling to Daniel Kretinsky’s EP Equity Investment (EPEI) vehicle?

Atos is negotiating a $2 billion sale of its loss-making legacy operations, known as Tech Foundations business, to Daniel Kretinsky’s EPEI vehicle.

What will Atos gain from the sale of its legacy operations?

The sale will enable Atos to reduce its debt load and refocus on its cybersecurity and cloud services core competencies.

What is Daniel Kretinsky’s investment strategy?

Daniel Kretinsky’s investment strategy involves buying cheap assets and turning them into successful businesses, as evidenced by his previous acquisitions in various industries.

How will Atos’s restructuring strategy change following the sale of its legacy operations?

After the sale, Atos will continue to operate its Tech Foundations division under the Atos name. In contrast, the rest of the company’s assets, including cybersecurity division BDS and supercomputers, will be rebranded as Eviden.

How does Atos plan to raise funds through share sales?

Atos plans to raise 900 million euros through a share sale, with Daniel Kretinsky’s EPEI reserving shares worth 180 million euros, giving him a 7.5% stake in the newly formed entity, Eviden.

What are the potential consequences of the sale for Atos and Daniel Kretinsky?

The sale will allow Atos to rededicate resources to its core competencies, improve its long-term growth prospects, and reduce its debt. For Daniel Kretinsky, the purchase will help expand his investment portfolio and broaden his range of investments.

How has the market responded to the potential acquisition news?

The market has responded favorably to the news, increasing Atos’s share price by 8 percent, reflecting investors’ optimism about the company’s reorganization and future prospects.

How has Atos’s management been affected by the restructuring and possible sale?

As part of the strategic realignment, Atos announced a change in leadership, with CFO Nathalie Senechault leaving and her replacement, Paul Saleh, taking over.

What does the sale mean for both Atos and Daniel Kretinsky’s future?

The sale marks a significant step for both companies, allowing Atos to focus on its core strengths and financial security. At the same time, Daniel Kretinsky expands his investment portfolio and gains valuable assets for his long-term investment plan.

How has Atos’s stock price reacted to the potential sale?

Atos’s stock price has fluctuated significantly over the past few years, but the market has received the potential sale well, indicating optimism about the company’s future.

Originally published on ReadWrite.