Capgemini Group Q1 Revenues Rise; To Buy IGATE In $4.0 Bln Deal - Quick Facts

(RTTNews) - Capgemini Group (CAPP, CGEMY.PK) reported that its consolidated revenues were 2.764 billion euros in the first quarter of 2015, up 10.5% at current Group structure and exchange rates compared to the first quarter of 2014. At constant Group structure and exchange rates, the growth of revenues was up 1.5%.

In North America, the company's revenue was up 11.7% on a like-for-like basis and up 33.8% at current Group structure and exchange rates. Meanwhile, the regions of Asia Pacific and Latin America reported organic growth of 22.9%.

Based on the first quarter results, the Group raises its growth objectives for 2015: Capgemini forecasts a revenue growth, at current rates and perimeter, of at least 5% (although it had communicated a growth objective of 3% to 5% in February).

Furthermore, the Group confirms that it is targeting an operating margin rate between 9.5% and 9.8%. Organic free cash flow is expected to exceed 600 million euros.

Separately, Capgemini said that it agreed to acquire IGATE for a cash consideration of $48 per share. The transaction will amount to $4.0 billion and is expected to be immediately accretive to Capgemini's normalized Earnings Per Share.

The merger agreement has been approved unanimously by both Capgemini's and IGATE's Board of Directors.

The transaction has also been approved by the written consent of shareholders holding a majority of IGATE's shares.

This transaction would lead to a group with an estimated combined revenue of 12.5 billion euros in 2015, an operating margin above 10% and around 190,000 employees.

the transaction will accelerate the use of Capgemini's tax loss carry forward in North America, resulting in an accretion to normalized EPS of at least +12% in 2016 and +16% in 2017.

The merger is subject to the customary closing conditions, including regulatory approvals. The transaction is expected to close in the second half of 2015.