- Combined revenue of €3.1bn and a
group boasting over 35,000 professionals, located in 24 countries,
at the service of major international clients
- Highly complementary business
activities and geographies, creating one of the most complete
portfolios of offerings available on the market
- A Solutions and Business Process
Services activity representing 25% of revenue
- A value-creating transaction, thanks
to significant revenue synergies and annual operational cost
savings of €62m
- Balanced corporate governance, with
Pierre Pasquier as Chairman of the Board of Directors and François
Enaud Chief Executive Officer
- A new entrepreneurial project backed
by a stable reference shareholder base and a shareholders’ pact
between Sopra GMT and Soderi
Regulatory News:
Sopra (Paris:SOP):
Sopra (NYSE EURONEXT:SOP) and Steria (NYSE EURONEXT:RIA)
announced today their intention to create, by carrying out the
proposed tie-up, to create a European leader in digital services
with a combined revenue of €3.1bn and operations in 24 countries,
combining the talents of over 35,000 professionals.
The proposed tie-up will take the form of a friendly, voluntary
Offre Publique d’Echange (Public Exchange Offer)1 initiated by
Sopra for all of the shares of Steria on the basis of one (1) Sopra
share for four (4) Steria shares (the “Offer”). At 4 April 2014,
this Offer represented an exchange value of €222 per Steria share
on the basis of the weighted average Sopra share price over a
one-month period. This represents a 40% premium with respect to the
closing share price and a 49% premium with respect to the weighted
average share price over the preceding three-month period.
The Board of Directors of Soderi, the associé commandité
(general partner) of Steria, as well as the Supervisory Board of
Steria and the Board of Directors of Sopra, at their meetings
today, approved this proposed tie-up and gave it their support,
provided that the transaction remains conditional on the FCPE
Groupe Steriactions, which owns 17.45% of the share capital and
20.92% of the voting rights, committing to contribute its shares to
Sopra at the latest by 9 April 2014, the completion thereof being
itself conditional on the Offer being successful.
Pierre Pasquier, Chairman and founder of Sopra and François
Enaud, CEO of Steria, issued the following statement: “Our
respective firms share cultures of independence and growth and a
great deal of mutual respect. The idea of combining forces has
always looked like it made sense. The accelerating pace of the
digital revolution and new modes of consuming services are giving
rise to a deep-seated change in our market. In this context our
tie-up aims to deliver the best transformation solutions to our
clients so that they can adapt to the digital world. The alliance
between Sopra and Steria would allow us to put together one of the
most complete portfolios of offerings available on the market, from
software solutions to business process execution. This industrial
project would also benefit our employees who would be able to
evolve and acquire new skills, and our shareholders would be able
to accompany us in a foundational, value-creating project”.
For Jean-Bernard Rampini, Chairman of Soderi: “This tie-up
project “between equals” maintains Steria’s human and industrial
assets and offers a great, unique opportunity to maintain the
values of employee-shareholders within the new group via a new
shareholder pact, which was a decisive factor for our support”.
Jacques Bentz, Chairman of Steria’s Supervisory Board and Eric
Hayat, Vice-Chairman of the Supervisory Board and co-founder of
Steria, added: “We chose to back this offer as it is a tie-up which
has been accepted by the general partner and represents a
substantial source of potential value creation for employees,
clients and shareholders”.
Balanced corporate governance and stable reference
shareholder structure
The new group would operate with a balanced corporate governance
structure in the framework of a proposed tie-up between equals.
Pierre Pasquier would be Chairman of its Board of Directors and
François Enaud would be Chief Executive Officer. On the Board of
Directors, Sopra and Steria would each be represented by four
directors, in addition to independent members and employee
representatives.
The share capital of the new combined entity would be
structured, on the one hand, around a core block representing the
founders and certain managers of Sopra, holding a total of
approximately 22% of the share capital, a block owned by Geninfo
representing 7% of the share capital, and finally a c.10% block
owned by former and current employees-shareholders of Steria. The
above-mentioned blocks together represent 39% of the share capital.
This shareholder structure would be materialised by a shareholders’
pact between Sopra GMT and Soderi, with the latter representing the
former employee-shareholders of Steria.
Very strong complementary fit of business activities and
geographic segments
From an industrial perspective, the proposed tie-up between
Sopra and Steria is a response to the market changes brought about
by the digital revolution and new modes of consuming services. The
new group would be able to make the transition from a positioning
as “Systems Developer-Integrator” to “Service Creator-Operator”,
with a critical mass and the capacity to deliver the best
transformation solutions to its clients. The portfolio of offerings
would be among the most complete on the market.
The new group would generate 25% of its annual revenue from
Solutions and Business Process Services, activities with the
highest levels of growth and profitability both for Sopra and
Steria. This proportion would develop rapidly, as a result of
organic and external growth as well as the synergies related to the
tie-up.
In terms of business activities and geographic segments, the
complementary fit between the two entities is very strong. Sopra
brings the power of its organisation in France, the strength of its
banking, human resources and real estate products and its effective
application management model. For its part, Steria brings its
international reach (Europe and Asia) with a strong positioning in
the United Kingdom, a pertinent offering in Business Process
Services and its expertise in IT infrastructure management.
Industrial-scale production capacity would be significantly
reinforced with an array of offshore and nearshore service centres
representing a workforce of approximately 8,000 people, including
over 6,000 in India.
A value-creating transaction drawing upon on a strong set of
synergies
Reinforcing competitive positioning and the complementary fit of
offerings and geographic locations would lead to faster revenue
growth. For example, Sopra would be able to benefit from the
European positions of Steria to accelerate the commercialisation
and rollout of its software solutions; for its part, Steria would
be able to leverage Sopra’s offshore capacity in India for its
French clients. The proposed tie-up should also generate annual
operational cost synergies of €62m commencing in 2017. The
transaction is expected to have a neutral effect on basic earnings
per share in 2015 and be strongly earnings enhancing as of
2016.
The ambition is to form a group that is capable of generating
strong organic growth with the objective of achieving revenue of
over €4bn and progressively improve the operating margin on
business activity to approach the 10% mark.
Schedule and conditions of the transaction
The Offer will be subject to the customary terms, notably to a
success threshold of at least 66.67% of the share capital and
voting rights issued by Steria.
Filing of the Offer could take place in May 2014.
Following the information-consultation of the companies’
employee-representing bodies and successful completion of the
Offer, a merger of the groups is expected to be carried out.
Presentation and Conference Call
The project will be presented to analysts and investors at a
meeting, to be held in French, on Tuesday, 8 April 2014 at 9.30 am
at Shangri-La Hotel, 10 avenue d’Iena, Paris.
The presentation will be jointly hosted by Pierre Pasquier,
Chairman of Sopra, and François Enaud, CEO of Steria.
This presentation can be followed remotely in French or English.
You may register for the webcast or listen to the presentation by
dialling +44 203 367 9454.
The practical information relating to this conference may be
consulted on the respective websites of the two
groups www.sopra.com and www.steria.com.
Sopra’s exclusive financial advisor is Société Générale; its
legal advisor is BDGS.
Steria’s exclusive financial advisor is BNP Paribas; its legal
advisor is Brandford-Griffith & Associés.
This announcement has been released for informational purposes
only and does not constitute and must not be considered as an offer
to purchase Groupe Stéria or Sopra shares. The release of this
announcement may be restricted by law in certain jurisdictions and,
therefore, any person holding this document must enquire about
applicable legal restrictions and comply with them. Therefore,
Groupe Stéria and Sopra decline all liability whatsoever with
regards to the potential violation, by any person, of these
restrictions.
1 Sopra and Steria reserve the possibility of completing the
tie-up by means of a fusion statutaire merger if necessary.
2 2013 Sopra dividend (€1.90 per share) attached.
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20140407006597/en/
Investor RelationsSopra:Kathleen Clark Bracco,
+33.1.40.67.29.61investors@sopra.comorSteria: Olivier Psaume,
+33.1.34.88.55.60olivier.psaume@steria.comorPress
RelationsImage Sept:Caroline Simon,
+33.1.53.70.74.65caroline.simon@image7.fr
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