It's official: Capgemini will acquire IGate for $4.04bn

In what will be a big deal for the global IT sector, Capgemini on Monday announced that it will acquire IGate in a transaction that will amount to $4.04 billion.

Capgemini and IGate entered into a definitive merger agreement under which it will acquire IGate. IGate is a US-listed technology and services company headquartered in New Jersey (US), with revenues over $1.2 billion, double-digit growth, 19% operating margin in 2014 and a global employee talent capital of 33,000.

The transaction is expected to be immediately accretive to Capgemini's operating margin and Earnings Per Share.

"The combined group strengthens Capgemini's position as a leading company in IT services, outsourcing and consulting, with an estimated combined revenue of $ 12.5 billion, combined operating margin above 10% and around 190,000 people serving clients worldwide," the company said in its press release.

Capgemini Chairman and CEO, Paul Hermelin said, "I am very pleased to announce a very important transaction in Capgemini's history. IGate is a leading company that perfectly fits our strategic ambition. It will give us a new status on the American market, and take further our industrialization journey to offer ever more competitive services to our clients. This will also give to the Group's Indian operations a new scale, allowing us to compete on par with the best US-based and Indian-based companies."

"This important move is fully in line with the Capgemini Group's strategy. With IGate, Capgemini would quicken its pace to respond to key, fast growing and innovative markets," Capegemini said.

The new company also stands to offer more platform-based and intellectual property-based solutions to help clients respond to and stay at the forefront of their market.