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Home >Companies >News >France’s Altran Tech buys Aricent for $2 billion

Mumbai: French engineering, research and development (ER&D) company Altran Technologies SA has acquired US design and engineering services firm Aricent Inc. at an enterprise value of $2 billion in an all-cash transaction, Altran said in a statement.

Altran acquired California-based Aricent (formerly Flextronics Software Systems) from a group of investors led by private equity firm KKR and Co. LP, which had a 79% stake in the company and was advised by JPMogan Chase and Co. Aricent claims to employ 12,000 engineers, designers and consultants at 19 locations, and has offices in Bengaluru, Gurugram, Pune, Hyderabad, Noida and Chennai.

Mint first reported about Altran’s interest in acquiring Aricent on 14 November. The report said KKR was in early stages of discussions to sell Aricent and Altran was one of the potential suitors.

Aricent was spun off from Flextronics in 2006 when KKR acquired a majority stake in it. KKR increased its stake from 62.5% to 79% in 2009.

Altran plans a €750 million rights issue to help finance the purchase, Reuters reported.

“The combination contains no overlap...and they’re bringing us com (communication), technology systems, semiconductors, software and design," Altran Technologies chief executive Dominique Cerutti said.

Paris-based Altran offers products and services in aerospace, automotive, defence, energy, finance, life sciences, railway and telecom businesses. In 2016, the Altran group generated revenues of €2 billion ($2.3 billlion). With a headcount of more than 30,000 employees, Altran is present in more than 20 countries.

The new entity will have close to €3 billion in revenue, 44,000 employees in 30 countries, including 15,000 near and offshore engineers across five global delivery centres, said the company statement. The global ER&D services market is expected to be worth €220 billion by 2020, it added.

“Through this acquisition, Altran will be uniquely positioned to offer an unmatched value proposition to its clients and outpace competition," Cerutti said.

Altran India was founded in 2004, with its country headquarters in Begaluru. Altran has strengthened its position in India through multiple buyouts in the last few years.

In 2015, Altran struck its first deal in India with its acquisition of Bengaluru-based start-up SiCon Design Technologies Pvt Ltd, for an undisclosed amount.

In February 2017, Altran acquired Pricol Technologies, a Pune-based engineering solutions provider.

In September, Altran acquired GlobalEdge Software Ltd, a Bengaluru-based product engineering company that specializes in embedded software solutions and Internet of Things (IoT) solutions. In India, Altran has a headcount of 3,000 people.

Reuters contributed to this story.

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