French global systems integrator Capgemini has inked a deal to acquire Australian-listed digital services consultancy firm RXP Services in a deal worth roughly $95.5 million.
RXP Services told shareholders on 11 November that it had entered into a scheme implementation deed under which Capgemini Australia will acquire 100 per cent of its shares, a deal that remains subject to shareholder and court approval.
However, RXP Services’ board of directors have unanimously recommended the scheme as it currently stands.
“The RXP board believes the offer from Capgemini represents an excellent opportunity for RXP shareholders to realise certain value at a significant premium,” RXP chairman John Pittard said.
“The RXP board has unanimously concluded that the scheme is an outstanding outcome for all RXP stakeholders: shareholders, employees, clients and other business partners,” he added.
For RXP co-founder and CEO Ross Fielding, the deal represents a good fit for the digital local services company.
“Capgemini is a truly global organisation, and a leader in consulting, engineering, technology and digital transformation services,” Fielding said. “RXP is a natural fit for Capgemini, and I am very excited by the growth opportunities this will create for our [around] 550 employees within a global and culturally aligned business.
“In addition, RXP’s valued clients stand to gain from an integrated group through increased scale, a broader skillset, and greater service capabilities,” he said.
Capgemini executive chairman for Asia Pacific and the Middle East Luc-Francois Salvador, meanwhile, said that the acquisition of RXP will help to make Capgemini a market leader in Australia in digital, data and cloud, enhancing the company’s ability to provide clients with value, scale and world-class expertise.
“This transaction will be a step change for Capgemini in Australia and illustrates Capgemini’s growth ambition in Asia Pacific. Both companies share similar values and vision of the role of technology and humanity in successfully transforming businesses and society,” Salvador said.
“Our strengths will enable us to use insights, design and technology to create inclusive and sustainable futures for our clients.”
Under the scheme, RXP shareholders will receive a cash consideration of $0.55 per RXP share. The cash consideration of $0.55 per RXP share values RXP’s issued equity at $95.5 million.
RXP will become a wholly owned subsidiary of Capgemini Australia.
In August, RXP Services revealed it had seen business activities slow down as the onset of COVID-19 pandemic took hold in the second half of FY20.
Revenue declined 10 per cent to $126.8 million and net profit also tumbled down 44 percent to a $1.9 million loss due to a non-cash goodwill impairment of $7.5 million taken in the first half of FY20.
Fielding said in August that COVID-19 had had a greater impact in the southern region as sales conversions began to slow. The deferral of a significant government project and a key client implementing a ‘10 days mandatory leave’ initiative also hampered results.
“We are now seeing the sales pipeline slowly building back up as businesses prioritise digital experience improvement. Tight alignment of resourcing to business wins, resulted in improved utilisation during the second half,” he said at the time.