French IT company Atos remains afloat as companies work to save the struggling business, but what happened to the multinational tech giant?
Founded in 1997, the company became recognized as an IT powerhouse as it grew with a series of notable transformations and acquisitions, including the purchase of Siemens IT Solution and Services in 2011 and French supercomputing company Bull in 2014.
Atos experienced rapid growth throughout the 2010s amid a period in which the company acquired Xerox ITO in 2014 and Syntel in 2018. During this period, the French company invested heavily, having paid more than 4.4 billion dollars for Xerox and Syntel combined.
The company's value increased accordingly, with Atos entering France's blue-chip CAC 40 index in 2017 and reporting revenues of more than $12 billion in 2022. By 2022, Atos had 100,500 employees worldwide.
But the French IT giant's fortunes would change quickly. A major $10 billion effort to acquire DCX Technology that would have seen the company nearly double in size failed in 2021.
DCX rejected Atos' offer, calling it inadequate, and both sides agreed to end negotiations shortly thereafter.
2021, a bad year for Atos, also saw the company lose more than $1 billion in market value after news emerged that auditors had discovered a series of accounting errors at two of its US assets.
Atos shares fell more than 10% immediately after disclosing the accounting discrepancies, which the company said were related to revenue recognition.
A flurry of leadership changes has also defined the last few years at Atos, going through five chief executives over the previous two and a half years and demonstrating a lack of a firm vision for the company's future, which only further eroded confidence. of investors.
Analysts have pointed to Atos' failure to reorient its operating model to adapt to the cloud computing shift that occurred over the previous decade as another factor contributing to declining profits and rising debt. .
An Atos rescue operation is underway, but the path to stability remains uncertain
Atos' future appears to depend on restructuring, raising new financing and rebuilding investor confidence.
On 28 February 2024, Atos confirmed that its negotiations to sell its legacy infrastructure, comprising its data center and hosting services, to investment firm EPEI for US$2 billion, had failed.
A month later, on March 19, talks with Airbus to buy the Atos BDS unit in a deal worth between €1 billion and €2 billion failed. According to reports from ReutersA person familiar with the deal said Airbus had concerns related to the current turmoil surrounding Atos, as well as the complexity of the deal.
At the end of March, market research company Onepoint, a major Atos shareholder, said it was ready to lead a rescue plan consisting of a consortium of companies seeking to shore up the company's stability and protect “the integrity of its assets.” “.
Atos' close ties to France's military and nuclear industries, as well as being responsible for cybersecurity for the Paris 2024 Olympics, mean there are serious concerns in the French government about the IT company's possible collapse.
French Prime Minister Gabriel Attal said on April 3, 2023 that the government's priority was to stabilize Atos' financial stability, and emphasized that the company's strategic activities spanning cybersecurity and supercomputing must remain under French control.
Onepoint announced that investment firm Butler Industries would join a consortium of companies seeking to rescue the company. According to a statement from Onepoint, the consortium is interested in protecting and preserving all the group's assets.
On April 8, 2024, Atos submitted its refinancing plan to creditors, seeking $600 million in cash, as well as $600 million in credit lines and loan guarantees to keep the business afloat.
