Atos floats DXC acquisition proposal

Atos, an IT services company based in Paris, has approached DXC Technology regarding a possible acquisition -- a move that would boost the French firm's presence in North America and underscore the push for greater scale among service providers.

In a statement, Atos confirmed its interest in a "friendly transaction between the two groups in order to create a digital services leader." DXC Technology, an IT services provider based in Tysons, Va., acknowledged receiving an "unsolicited, preliminary and non-binding proposal" from Atos regarding an acquisition of all the company's shares. DXC Technology's board will evaluate the proposal, the company said in a statement.

The DXC acquisition would result in a company with combined revenue of roughly $34 billion.

"If consummated, this deal would offer Atos access to the DXC customer base for purposes of cross-sell and upsell and also contribute to Atos' goals of greater North American market presence and inorganic growth," said Bill Martorelli, a principal analyst at market research firm Forrester Research.

Martorelli said the acquisition could also "strongly impact the partnership landscape," noting that Atos and DXC Technology are two of the largest SAP integrators and Google orchestrators.

Nearly a year ago, Atos acquired Maven Wave, a Chicago-based Google Cloud Premier Partner.

DXC Technology launched in 2017, following the merger of HPE's Enterprise Services division and systems integrator CSC. HPE's Enterprise Services also developed out of acquisition activity. Hewlett Packard acquired integrator Electric Data Systems in 2008, prior to Hewlett Packard's split into HPE and HP Inc.

Citing that acquisition history, Martorelli said "many of DXC's customers have been through a lot of transition." The Atos acquisition would offer such customers "a way forward with less uncertainty beyond the vagaries of any such transaction." He said it remains to be seen whether customers would welcome another change, even a positive one.

The proposed DXC acquisition offers additional evidence that IT services players are striving for scalability and focus, Martorelli said, citing IBM's plan to spin off its IT services business.

Atos values DXC Technology at more than $10 billion, according to a Reuters report.

Beyond the possible Atos-DXC deal, other recent merger and acquisition (M&A) transactions include:

• Pax8, a cloud distributor based in Denver, acquired Wirehive, a cloud hosting and consultancy firm based in the United Kingdom. Pax8 said the purchase expands the company's reach across technologies and geographic regions.
• Navisite, a managed cloud service provider based in Andover, Mass., purchased Velocity Technology Solutions, a cloud MSP that provides services around Infor, Oracle and SAP ERP offerings.
• Sysnet Global Solutions, a cybersecurity and compliance solutions provider based in Dublin, acquired NuArx. The acquired company, based in Southfield, Mich., offers Payment Card Industry compliance, managed security and digital transformation offerings. The deal is Sysnet's third M&A transaction in the U.S. in the last five weeks.
• Velocity, a managed services company based in Holland, Ohio, purchased Eye Corp Media, a digital out-of-home media company. Velocity offers network management, connectivity and telecommunications services. Digital out-of-home technology includes digital billboards and signage.
• Bluebird Network, a communications infrastructure provider and data center operator based in Columbia, Mo., acquired ColoHub Data Center. ColoHub was previously owned by Geneseo Communications, which is based in Bettendorf, Iowa.
• Valeo Networks, a division of Saalex Corp. and a managed security service provider, purchased Etech Solutions, an MSP based in Iowa. Etech Solutions provides Florida-based Valeo Networks its first office in the Midwest.
• Netrix, a professional services firm and MSP based in Chicago, acquired the managed services business unit of Prosum. The deal expands Netrix's west coast presence. Prosum is based in Los Angeles.
• Woolpert, a consulting firm that focuses on the architecture, engineering and geospatial sector, purchased Data Cloud Solutions, a systems integrator and cloud solutions provider in Springfield, Ohio.