(News Bulletin 247) – The digital services company announced on Tuesday that it had launched a takeover bid for its Batavian competitor for a total amount of 518 million euros. This will allow it to generate revenues of 700 million euros in Benelux.

Sopra Steria is further accelerating external growth, which has intensified significantly since the arrival of Cyril Malargé, a year ago, at the head of the company. The digital services company on Tuesday announced a friendly takeover bid for shares in Dutch company Ordina.

This transaction retains a price per share of 5.75 euros ex-dividend, i.e. a premium of 20% compared to the closing on Monday evening (4.78 euros) and 43% on the basis of the average price weighted by volumes. of the last three months. The total amount of the acquisition amounts to 518 million euros.

Founded in the 1970s, Ordina generated revenues of 430 million euros last year, up 9% year-on-year. Its revenues are made in the Netherlands for 283.53 million euros, as well as in Luxembourg and Belgium. Its clients are in particular players in the public sector (43%), finance (26%) and industry (31%).

Through this transaction, the group is considerably stronger in the Benelux region (Belgium, Luxembourg and the Netherlands), which would represent 11% of Sopra Steria’s revenues after the transaction, i.e. the country’s third largest region, behind France (39 %) and the United Kingdom (15%).

The third region of the group

Its revenues in the Benelux region will thus increase to 700 million euros, taking into account, in addition to Ordina, the acquisition by Sopra Steria of Tobiana. The group announced the takeover of this company last November, which should thus add 110 million euros in revenue generated exclusively in Belgium.

Sopra Steria is thus pursuing its strategy of strengthening its position in geographies deemed promising by acquiring market share through external growth.

According to the company, the digital services market in the Benelux is estimated at 31 billion euros for 2022, while the region has 28 million inhabitants. In comparison, the French market stands at 44 billion euros for 68 million inhabitants. In addition, the annual growth of this market in the Benelux is expected at 8% for the next three years, according to a Gartner report quoted by the company.

In terms of financial impact, Sopra Stera assesses “operational complementarities” of 10 million euros per year at cruising speed. The company estimates that the transaction will have a beneficial effect on its earnings per share of 1.2% in 2024 and 3.7% the following year.

The action pitches

In addition, debt leverage, measured by the ratio of net debt to gross operating surplus (Ebitda), would remain under control. The company estimates that it would reach 1.5 at the end of 2023 by integrating this operation, which will be financed by its cash and by debt. Sopra Steria expects this acquisition to be finalized in the fourth quarter of 2023.

At the Paris Stock Exchange, the market warmly welcomes this announcement. The Sopra Steria title fell 0.7% around 1:20 p.m. in a rising market, the SBF 120 gaining 1.8% at the same time. The stock even fell more than 3% during the session.

“From a strategic point of view, the logic is interesting because it allows them to significantly strengthen themselves in the Benelux where the other major players are present. Still, the market tends to focus on the financial point of view, and on this aspect, the announcement does not really thrill investors because Sopra Steria was not the only one to covet Ordina”, explains a financial analyst.

Ordina had indeed indicated in mid-March that it had entered into discussions with “several parties” with a view to a potential public offer.

This takeover comes as the group has also just finalized another medium-sized acquisition. At the end of February, Sopra Steria completed the acquisition of CS Group, for an amount of 282.5 million euros on the basis of 100% of the capital (knowing that the French group owned 75% at the end of February), clearly strengthening the company in cybersecurity.

“After CS Group and Tobiana, the takeover of Ordina confirms the new ambitions displayed by [le groupe] since the appointment of Cyril Malargé as CEO [directeur général, NDLR]. While the timing is not ideal given the current risk aversion, Sopra Steria’s solid financial structure (2022 net debt of €152 million, i.e. 0.3 times EBITDA) limits the risk on this point”, comments Invest Securities.