Atos Outlines Plans to Get Acquired, and a Path Forward

By Agam Shah

May 21, 2024

Atos – via its subsidiary Eviden – is the second major supercomputer maker outside of HPE, while others have largely dropped out.

The lack of integrators and Atos’ financial turmoil have the HPC market worried. If Atos goes under, HPE will be the only major option for building large-scale systems.

Atos – which is up for sale – is in the process of being acquired, and a deal could be reached in July, said Bruno Lecointe, a group vice president at Eviden at ISC.

The shares of Atos, a French IT company, are trading at all-time lows on the Paris Euronext Market exchange. The company’s stock closed at €2.09 on May 17 and dipped to €1.7 in April. The company’s stock price peaked at around €130 in early 2000.

The company is also sitting on $5 billion in debt and has changed CEOs three times in two years. However, the company is showing signs of life with a financial turnaround and a healthy order backlog.

Atos reported a normalized net income (minus one-time charges) of $78 million in 2023, compared to a net loss of $28 million in 2022. However, the 2023 net loss, including the one-time charges, is $3.5 billion, compared to $2.55 in 2022.

Moderators at an Eviden – the IT infrastructure division – vendor spotlight session asked Lecointe to clarify the company’s direction. He said much misinformation was going around and assured the audience that the company was righting the ship.

“There is a lot of fantasy around. That’s probably because some journalists need…to invent some stories. Maybe some competitors are also playing with that, but let me give you an update,” Lecointe said.

He went on to provide a timeline—Atos is in the final steps of reorganization, and in early May, the company shared acquisition proposals from four companies, which have been narrowed down to three.

The offers came from entities including Bain Capital, EP Equity Investment (controlled by Czech billionaire Daniel Kretinsky), and Onepoint (controlled by French businessman David Layani), and “a group of bondholders and banks of the Company’s banking group,” the company said in a statement earlier this month.

The board rejected the offer from Bain Capital. According to media reports, it recently rejected Kretinsky’s proposal.

The board of Atos is considering proposals that “take care of employees, customers, suppliers, and the shareholders, in this ranking,” Lecointe said.

“By the end of May, the board will finalize the selection of one of the three to buy us, and by July, the [contract] should be signed,” Lecointe said.

Eviden was formally established after Atos announced plans to split its operations into various subsidiaries. The Eviden subsidiary focuses on IT infrastructure, while Atos focuses on IT services, software, and cybersecurity.

Eviden has become the face of Europe’s IT sovereignty and has won major contracts to build supercomputers in Europe. It has built the Jupiter exascale supercomputer in Germany, which uses a Rhea-1 CPU from French chipmaker SiPearl.

Eviden’s top rival is HPE, which built the top two exascale supercomputers—Frontier and Aurora—housed in U.S. national labs.

The French government has also expressed an interest in investing between $700 million and $1 billion in Atos, but only limited to its BDS (Big Data and Security) division, Lecointe said. 

The French government is doing its due diligence, and the deal could be finalized in the coming months.

The French government’s investment is to secure computing assets that are important to national security. Another motivation could be to protect critical infrastructure, such as high-performance and quantum computers.

The French government is trying to raise its technology competitiveness. The possibility of Atos’ sale to a foreign entity could be a motivator.

The BDS operations are stable, Lecointe reassured. He also said a third party was involved in the BDS deal with the French government. In the past, Airbus tried to acquire Atos’ BDS operations but dropped out in March.

“We just need to stop being polluted by all the, let’s say, surrounding noises. Our BDS or advanced computing activities and cyber will be totally safe,” Lecointe said.

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