Alten Makes its Largest Acquisition Ever, in Digital

/ November 15, 2020/ Alten, France, Italy, M&A (large, with revenues above $50m)

SDG Is Alten’s Largest Acquisition

Alten is to make its largest acquisition, with Milan-headquartered SDG Group. SDG has revenues of EUR 76m and a headcount of 950. Its operating margin is ~10%. We estimate the price paid by Alten to ~EUR 60m.

The acquisition is unusually large for Alten. While Alten gains approximately 1,000 engineers per year through acquisitions, it does it through small firms. Alten has taken over many firms with less than 300 employees. However, we estimate that Alten made only five acquisitions with more than 400 employees. See the Alten’s Largest Acquisitions table below.

SDG Strengthens Alten’s Digital Capabilities

This acquisition is not a surprise: Alten had guided the market it would make in H2 2020, a large acquisition involving up to 1,000 employees. The pleasant surprise comes from SDG’s capabilities: SDG brings data analytics and AI consulting and systems integration services. The acquisition strengthens the digital capabilities of Alten significantly at a competitive price. Alten proves, once again, how effective it is in acquiring competitors at what it considers the right price.

Alten Has Funding for Other Acquisitions

There may be other acquisitions to come; Alten had a net cash position of EUR 224m at the end of H1 2020. Alten has also managed well its cash and makes M&As at competitive prices. Also, this year, because of the pandemic, Alten canceled its dividend. Alten has the funding; it now needs to find the right targets.

Alten’s Largest Acquisitions

SDG Group
Milan, Italy
H2 2020
EUR 76m
Analytics and AI consulting and systems integration capabilities
Unnamed Japanese-Chinese firm
H1 2020
400 employees
EUR 18m
Calsoft Labs
Chennai and Bangalore, India
H1 2015

600 employees
USD 22m
Software product development and embedded software
Telecom, consumer electronics, and ISVs
Geci Engineering
H1 2014
550 employees
EUR 35m
Wing engineering, mechanical and electrical engineering, and manufacturing IT
Client base in aeronautics, and also in space, naval, and train
Also has a presence in Germany, Spain, and Romania
610 employees
EUR 46m
Automotive body design and engineering.
Idestyle went bankrupt in H2 2009.

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