Thales has revealed it could swoop in to buy part of Atos, a day after the French government announced it plans to purchase key assets from the troubled IT infrastructure provider.
Speaking on the company’s earnings call on Tuesday, Thales CFO Pascal Bouchiat said his firm was potentially interested in acquiring Atos’s defense business, which provides Edge devices and other IT infrastructure, as well as software, to military clients.
Atos has struggled financially for several years, and is under pressure to sell its assets to service mounting debts. It is set to receive help from the French government, which plans to purchase part of the business in a deal that could be worth up to €1 billion ($1.07bn).
Will Thales come to rescue Atos?
Thales, which provides a wide range of digital services to customers in sectors including defense, is itself part-owned by French taxpayers.
Bouchiat told investors that it has no interest in buying the Atos BDS business unit, which covers all its AI, cybersecurity, data and high-performance computing (HPC) operations. But he said it might make a bid for the defense assets.
In comments to reporters following the earnings call, Bouchiat explained: “Inside BDS, which is essentially a cybersecurity services activity, there is another activity that is much more modest in size, which is related to defense and security.
"If at some point this particular defense and security business, which is a minority of BDS, were on sale, then we would not object to looking at it.”
French government seeks to secure Atos assets
Bouchiat declined to comment on whether Thales was involved in the French government bid to buy Atos assets.
On Monday, Atos told the French stock exchange that ministers had sent it a letter of intent offering to acquire assets deemed to have strategic importance for France. These include Atos's advanced computing, mission-critical systems, and cybersecurity products.
The government has offered to acquire 100 percent of these assets, and puts an indicative value of €700 million ($749m) to €1 billion ($1.07bn) on the deal.
Atos is seen as a business of strategic importance in France, and works closely with the country’s army, navy and air force, as well as its nuclear industry. It is the principal IT supplier for this summer’s Paris Olympics.
“Atos has a number of activities that are strategic for the French nation, strategic for our sovereignty, and strategic for our defense in terms of cyber security, supercomputers, and nuclear,” French finance and economy minister Bruno Le Maire said in an interview with LCI.
“In Atos, there are sovereign activities that must remain under the exclusive control of France.”
Le Maire said the government will look for partners from industry willing to co-invest in the Atos business.
Atos struggles continue
Atos has been in the doldrums for several years, and in 2021 split its business into two separate units - Eviden and Tech Foundations - as part of a turn-around plan designed to return it to growth.
Eviden manages the BDS business unit, the company’s cloud, cybersecurity, data and supercomputing efforts, which are seen as potential growth areas. Tech Foundations, meanwhile, oversees its less-profitable legacy managed infrastructure contracts. Atos operates five of its own data centers according to Data Center Platform, three in France and one each in Austria and Germany.
Though the initial idea was to run Eviden and Tech Foundations as separate, publicly-listed, businesses under the Atos umbrella, the debt problems facing the company have led to both units being put up for sale. However, a planned acquisition of Tech Foundations by private equity fund EPEI fell through last year, and in March it was confirmed that talks between Atos and Airbus, which would have seen the latter purchase part of Eviden for €1.8 billion ($2bn) had been called off too.
In March the company posted a record annual loss and said it was planning to refinance its debts, which currently stand at €3.9 billion ($4.18bn). Last week it revealed the amount of cash it needs to find to get through 2024 and 2025 is €1.1 billion ($1.18bn), almost double the €600 million ($643m) it had previously stated.
Check out the latest edition of DCD Magazine for an in-depth look at the situation at Atos. Read the magazine for free here.
