Post Igate acquisition, Capgemini looks at placing new structure by Jan 2016

Integration of Igate paves way for largely Europe-focused Capgemini to strengthen its presence in the lucrative North American market

French information technology services and consulting company Capgemini on Thursday said it expected the integration of IGATE with itself to be completed by the end of this year, after which it would announce a new organisational structure.

The company has hired a consulting firm to support the integration process, apart from setting up an integration team with one senior executive each from IGATE and Capgemini.

One of the priorities would be to put the “new structure in place by January 1, 2016,” the firm said in a presentation to analysts after declaring its financial results for the half-year period ending June 30, 2015.

Capgemini has set up a two-member team of Theirry Delaporte, head of the financial services global business unit at Capgemini, and Srinivas Kandula, chief people officer at Igate, to expedite the integration. IGATE’s Chief Executive Officer and President Ashok Vemuri had also joined Capgemini’s group management board, the presentation said. In April this year, Capgemini announced it was acquiring IGATE for $4 billion, a valuation of 14.5 times its earnings before interest, tax, depreciation and amortisation. Integration of the companies would be a priority for the next six months, it said.

The Europe-focused Capgemini plans to strengthen its presence in the lucrative North American market, which used to account for almost 80 per cent of IGATE’s revenue. The integration would prioritise North American clients, Capgemini said in the release announcing the financial performance for the January-June period. Following the buyout of IGATE, the combined employee strength of the group is around 180,000, including 96,000 people located in its global delivery centres, one of which is in India.

The company’s share of offshore employees now constitutes 48 per cent of the total workforce, up 1.4 per cent from the comparable six-month period.