Atos enters talks with French govt over €500M advanced computing sale

Further to its press release dated October 7, 2024, Atos SE announces it has received a non-binding offer from the French State for the potential acquisition of 100% of the Advanced Computing activities of its BDS division, based on an enterprise value of €500 million, to be potentially increased to €625 million including earn-outs.

Atos’ Advanced Computing business regroups the High-Performance Computing (HPC) & Quantum as well as the Business Computing & Artificial intelligence divisions. The business currently employs approximatively 2,500 employees and generated revenue of circa €570 million in 2023.

The offer received from the French State provides for an exclusivity period until May 31, 2025. If the exclusive negotiations lead to an agreement and subject to obtaining the customary commercial, employee and administrative authorizations, a Share Purchase Agreement may be signed by that date. An initial payment of €150 million is expected to be made available to Atos upon signing of the Share Purchase Agreement.

As agreed upon with financial creditors, a valuation of the disposed perimeter will be carried by an independent expert appointed by the Company to assess notably that the terms of the transaction reflects a fair market value. In addition, in accordance with the judgement approving the Company’s accelerated safeguard plan and in the absence of a substantial change in the objectives and resources of the plan, the transaction is subject to the information of the specialized commercial court of Nanterre via the SELARL AJRS, represented by Mr Thibaut Martinat, acting as plan supervisor (commissaire à l’exécution du plan).

In addition, Atos would commit to launch a formal sale process for its Cybersecurity products and Mission Critical Systems, which generated revenue of circa €340 million in 2023.

Impact of the sale of Advanced Computing on the current financial restructuring process and timetable

The accelerated safeguard plan, approved by the classes of affected parties on 27 September 2024 and by the specialized commercial court of Nanterre on 24 October 2024, included the possibility of the disposal of the Group’s Advanced Computing activities. The forecasts presented in the accelerated safeguard plan, however, did not take this disposal into account considering the ongoing discussions.

On the basis of an enterprise value of €500 million, the proposed transaction is expected to lead to a 2027 financial leverage2 of between 1.8x and 2.1x, depending on the outcome of the ongoing €233 million rights issue.

The Company will file with the French Autorité des Marchés Financiers (the “AMF”) a supplement to the prospectus relating to the ongoing €233 million rights issue, approved by the AMF under number 24-474 on 7 November 2024:

• Investors who have already placed subscription orders will have the option of withdrawing them for two (2) trading days following the approval of the supplement by the AMF.
• The subscription period for the rights issue, which was supposed to close on 25 November 2024, will be extended, in accordance with the indicative timetable that will be included in the supplement.

The indicative closing date of the financial restructuring transactions is still planned by year-end or early January 2025.

The Company will continue to inform the market in due course of the next steps of its financial restructuring.

CT Bureau