French computer services and technology company Capgemini announced on Monday that it would buy IGATE Corp in a $4.04 billion transaction. The acquisition would bring the combined revenue of the merged entity to 12.5 billion euros ($13.5 billion).
After the merger, the company will have a combined operating margin of over 10 percent, and employ about 190,000 people worldwide, the company said, in a statement released Monday. New Jersey-based IGATE, which has nearly 40 percent of its workforce in India, earns about 80 percent of its revenues from North America. With the acquisition, Capgemini, which reported an 11.7 percent revenue growth in North America in the first quarter of 2015, would expand its presence in North America.
“The combination of IGATE and Capgemini increases the Group’s revenues in the region (North America) by 33 percent to an estimated $4 billion,” the company said, in the statement. This would make North America its largest market, accounting for approximately 30 percent of the combined revenues in 2015.
Capgemini is currently valued at $14 billion while IGATE, whose shares closed at $45.85 on Friday, has a market capitalization of $3.7 billion.
The merger has been agreed by the boards of both companies and a majority of IGATE shareholders, and the transaction is expected to be finalized in the second half of 2015.