Finland-based IT services firm Tieto has acquired EVRY for $1.5bn, creating a digital, consultancy and cloud services business with revenues of almost €3bn and 24,000 employees.
The merger will take place as a taxable statutory cross-border absorption merger of EVRY into Tieto. EVRY shareholders will receive 0.12 new shares in Tieto and NOK 5.28 in cash for each share in EVRY, with EVRY shareholders receiving around 37.5 per cent ownership in the combined company.
The deal values EVRY at NOK 35.48 per share - a 15.4 per cent premium on its closing share price on 17 June. Tieto bankrolled the transaction through financing from Nordea Bank and Skandinaviska Enskilda Banken worth a total of €700m, made up of a €300m bridge loan facility and a €400m term loan facility.
Tieto is expecting the deal to close in Q4 this year or Q1 of 2020 "at the latest", with the new combined company to be rebranded as TietoEVRY. Its shares will be listed on NASDAQ Helsinki, NASDAQ Stockholm and the Oslo Stock Exchange.
The Finnish firm's original headquarters in Espoo, Finland, will become the new global headquarters of the company.
Tieto CEO Kimmo Alkio (pictured right) will lead as CEO of TietoEVRY. Per Hove (pictured left) will remain as EVRY's CEO until the close of the transaction, after which he will work closely with Alkio to integrate the two companies.
The merger will create a company with combined revenues of €2.94bn and operating profits (EBIT) of €750m. Tieto turned over €1.60bn last year, while EVRY generated €1.34bn in sales.
The Finnish IT services firm claims that once the merger is completed, it will look to create annual cost-saving synergies of around €75m, through driving efficiencies "in delivery and selling", general administrative expenses as well as "portfolio and investment rationalisation".
Around 60 per cent of the savings will be achieved by the end of 2021, claims Tieto, with 90 per cent expected to be realised before the end of 2022.
Tieto is bracing itself for one-off costs totalling €120m to €140m until 2022 as it embarks on its cost-saving initiatives.
The firm claims the merger will create one of the largest digital services companies in the Nordics. EVRY will add fintech solutions for the global financial services industry, Tieto claims, with both companies offering complementary capabilities in digital consulting, industry software and cloud and infrastructure services.
Tieto and EVRY share existing strengths in healthcare and public sector verticals in the Nordics, but the firm claims that growing its fintech, industry-specific software and product development businesses will be the "spearheads" of further international expansion.
Tieto is ranked 24th on CPI's list of the 35 top public cloud providers in Europe. It holds an Advanced-level badge with AWS, Gold status with Microsoft and is a Services Partner with Workday.
The combined firm boasts more than 5,000 digital consultants in the Nordics and 10,000 globally.
"This combination announced today will create a company well positioned to be a leading provider of digital transformation across the Nordics for the benefit of our customers, employees, shareholders and the society. With continued investments in our people, latest technologies such as robotics, cloud and artificial intelligence, the combination will be a truly competitive digital partner for our customers," said Tieto CEO Alkio in a statement.
"I believe we will create exciting opportunities for professional and personal growth for employees in both companies - and a strong value proposition for our customers. I foresee a very exciting journey ahead."
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