Kanbay (NASDAQ:KBAY)
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From May 2019 to May 2024
Capgemini, one of the world’s foremost
providers of Consulting, Technology and Outsourcing services, and Kanbay
International, (NASDAQ: KBAY), a global IT services firm focused on the
financial services industry, announced today that they have entered into
a definitive merger agreement.
Under the terms of the merger agreement, Capgemini will acquire all of
the outstanding common shares of Kanbay for $29 per share in cash. This
represents a premium of 15.9% to Kanbay’s
closing share price on Wednesday October 25 and 28.3% to the average
price during the month prior to announcement. The transaction values
Kanbay’s share capital including vested stock
options, warrants and restricted shares at $1.25 billion. The Boards of
Directors of Capgemini and Kanbay have approved the transaction.
The transaction is subject to customary closing conditions, including
Kanbay’s shareholders approval and anti-trust
clearance. It is expected that the transaction will close by early 2007.
In addition, Capgemini has entered into share purchase agreements to
acquire 14.9% of Kanbay’s outstanding shares
from certain core shareholders.
This acquisition is fully in line with Capgemini’s
expansion strategy:
it significantly increases Capgemini’s
presence in India (+89% based on Q3 figures). The combined company
would have headcount reaching 12,000 employees by the end of 2006 in
India which would therefore become the second largest country (with
16% of total headcount);
it strengthens Capgemini’s presence in North
America and confirms the Group’s ambition
in this market;
it positions Capgemini as a leader in the Financial Services sector -
which accounts for 22% of the global IT market - and enhances its
domain expertise.
This transaction is expected to have a positive impact on Capgemini’s
earnings per share. The anticipated EPS accretion is in excess of 5% in
2007 and 10% in 2008.
Capgemini is in a position to fully finance this transaction with its
significant end of year net cash position. It doesn’t
exclude to raise up to 500 million euros in equity to rebuild room for
maneuver and participate to a possible further movement of
consolidation. Both decision and timing will be subject to the then
prevailing market conditions.
Raymond J. Spencer, Chairman and Chief Executive Officer of Kanbay, will
join the top management of Capgemini. Mr. Spencer stated: “The
combination of Kanbay with Capgemini is very exciting news for our
shareholders, customers and employees. While this transaction creates
excellent value for shareholders, Capgemini also shares our existing
vision and stated strategy. Thus, this deal represents a continuation of
our existing approach. In addition, the two organizations will benefit
from complementary business philosophies and cultures.”
Capgemini Chief Executive Officer, Paul Hermelin noted: “The
acquisition of Kanbay, a world-class IT services provider, supports our
growth strategy and significantly enhances our global Banking, Financial
Services and Insurance (BFSI) practice, particularly in North America
and India, where Kanbay has over 5,000 associates. The acquisition also
gives us valuable capabilities in Consumer and Industrial Products,
Telecommunications, Media, Life Sciences and the Travel & Leisure
verticals.”
“The acquisition of Kanbay is
excellent news for our shareholders, our clients and our people. It fits
in perfectly with the Group’s expansion
program called I3 which focuses
on three levers: industrialization, intimacy with our clients and
innovation” underlines Mr. Hermelin. “This
acquisition occurs in a context of strong momentum for Capgemini: after
releasing good H1 results, the Group posts a 13.5% revenue growth at
constant rates and perimeter in the 2006 third quarter.”
The combination of Kanbay and Capgemini creates a top-tier global IT
services firm with unparalleled domain knowledge in the financial
services vertical, seamless consulting and technology expertise, and
market leading offshore resources. Paul Hermelin and Raymond Spencer
concluded: “We believe this is a landmark
transaction in the global IT services industry. This event can
fundamentally transform the professional services industry by enabling
efficient global services delivery via an integrated single point
solution delivered in a seamless fashion resulting in a lower total cost
of ownership for the client.”
Lazard Freres and Morgan Stanley acted as financial advisors to
Capgemini in connection with the transaction. Skadden, Arps, Slate,
Meagher & Flom LLP, and Latham & Watkins (as special anti-trust counsel)
acted as legal advisers to Capgemini in connection with the transaction.
UBS Securities LLC acted as financial adviser to Kanbay and provided a
fairness opinion in connection with the transaction. Winston & Strawn
LLP acted as legal adviser to Kanbay in connection with the transaction.
About CAPGEMINI
Capgemini, one of the world's foremost providers of Consulting,
Technology and Outsourcing services, has a unique way of working with
its clients, which it calls the Collaborative Business Experience.
Through commitment to mutual success and the achievement of tangible
value, Capgemini helps businesses implement growth strategies, leverage
technology, and thrive through the power of collaboration. Capgemini
employs approximately 65,000 people worldwide and reported 2005 global
revenues of euros 6,954 million.
More information is available at www.Capgemini.com
About KANBAY
Founded in 1989, Kanbay, Inc. (NASDAQ: KBAY) is a global IT services
firm with approximately 6,900 associates worldwide. Kanbay provides a
highly integrated suite of management consulting, technology integration
and development, and outsourcing solutions through a proven global
delivery platform to clients focused on Financial Services and Consumer
& Industrial Products, as well as an emerging presence in the
Communications & Media and Life Sciences industries. Kanbay is a CMM
Level 5 assessed company headquartered in greater Chicago with offices
in North America and India as well as London, Singapore, Hong Kong,
Tokyo and Melbourne.
More information is available at http://www.Kanbay.com.
This announcement is not an offering of securities in the United States
of America or elsewhere. Securities may not be offered or sold in the
USA absent registration or an applicable exemption from registration
requirements.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of
federal securities laws. Forward-looking statements with respect to the
completion of the transaction and the financial condition, results of
operations and business of the companies are subject to certain risks
and uncertainties that could cause actual results to differ materially
from those set forth in such statements. We can give no assurance that
any projections or future results discussed in these statements will be
achieved. Readers are cautioned not to place undue reliance on these
forward looking statements and any such forward-looking statements are
qualified in their entirety to the cautionary statements contained in
this press release. Neither CAPGEMINI nor KANBAY updates forward-looking
statements and expressly disclaims any obligation to do so.
Additional Information about the Transaction and Where to Find It
In connection with the proposed transaction, KANBAY intends to file
relevant materials with the Securities and Exchange Commission,
including a proxy statement on Schedule 14A. INVESTORS AND SECURITY
HOLDERS OF KANBAY ARE URGED TO READ THESE MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT KANBAY,
CAPGEMINI AND THE TRANSACTION. The proxy statement and other relevant
materials (when they become available) and any other documents filed by
KANBAY with the SEC may be obtained free of charge at the SEC’s
website at www.sec.gov. In addition,
investors and security holders may obtain free copies of the documents
filed with the SEC by Kanbay by accessing [the
“Investor Relations”
section of KANBAY’s website at www.Kanbay.com.
Investors and security holders are urged to read the proxy statement and
the other relevant materials when they become available before making
any voting or investment decision with respect to the proposed
transaction.
Capgemini and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders of
Kanbay in connection with the transaction described herein. Information
regarding the special interests of these directors and executive
officers will be included in the Proxy Statement/Prospectus to be
circulated in connection with the transaction. Additional information
regarding these directors and executive officers is also included in
Capgemini's information statements and publicly available reports. These
documents are available from Capgemini at www.capgemini.com,
by mail at 11, rue de Tilsitt, Paris 75017, France or by phone at
33-1-47-54-5000.
Capgemini, one of the world's foremost providers of Consulting,
Technology and Outsourcing services, and Kanbay International,
(NASDAQ: KBAY), a global IT services firm focused on the financial
services industry, announced today that they have entered into a
definitive merger agreement.
Under the terms of the merger agreement, Capgemini will acquire
all of the outstanding common shares of Kanbay for $29 per share in
cash. This represents a premium of 15.9% to Kanbay's closing share
price on Wednesday October 25 and 28.3% to the average price during
the month prior to announcement. The transaction values Kanbay's share
capital including vested stock options, warrants and restricted shares
at $1.25 billion. The Boards of Directors of Capgemini and Kanbay have
approved the transaction.
The transaction is subject to customary closing conditions,
including Kanbay's shareholders approval and anti-trust clearance. It
is expected that the transaction will close by early 2007.
In addition, Capgemini has entered into share purchase agreements
to acquire 14.9% of Kanbay's outstanding shares from certain core
shareholders.
This acquisition is fully in line with Capgemini's expansion
strategy:
-- it significantly increases Capgemini's presence in India (+89%
based on Q3 figures). The combined company would have
headcount reaching 12,000 employees by the end of 2006 in
India which would therefore become the second largest country
(with 16% of total headcount);
-- it strengthens Capgemini's presence in North America and
confirms the Group's ambition in this market;
-- it positions Capgemini as a leader in the Financial Services
sector - which accounts for 22% of the global IT market - and
enhances its domain expertise.
This transaction is expected to have a positive impact on
Capgemini's earnings per share. The anticipated EPS accretion is in
excess of 5% in 2007 and 10% in 2008.
Capgemini is in a position to fully finance this transaction with
its significant end of year net cash position. It doesn't exclude to
raise up to 500 million euros in equity to rebuild room for maneuver
and participate to a possible further movement of consolidation. Both
decision and timing will be subject to the then prevailing market
conditions.
Raymond J. Spencer, Chairman and Chief Executive Officer of
Kanbay, will join the top management of Capgemini. Mr. Spencer stated:
"The combination of Kanbay with Capgemini is very exciting news for
our shareholders, customers and employees. While this transaction
creates excellent value for shareholders, Capgemini also shares our
existing vision and stated strategy. Thus, this deal represents a
continuation of our existing approach. In addition, the two
organizations will benefit from complementary business philosophies
and cultures."
Capgemini Chief Executive Officer, Paul Hermelin noted: "The
acquisition of Kanbay, a world-class IT services provider, supports
our growth strategy and significantly enhances our global Banking,
Financial Services and Insurance (BFSI) practice, particularly in
North America and India, where Kanbay has over 5,000 associates. The
acquisition also gives us valuable capabilities in Consumer and
Industrial Products, Telecommunications, Media, Life Sciences and the
Travel & Leisure verticals."
"The acquisition of Kanbay is excellent news for our shareholders,
our clients and our people. It fits in perfectly with the Group's
expansion program called I cubed which focuses on three levers:
industrialization, intimacy with our clients and innovation"
underlines Mr. Hermelin. "This acquisition occurs in a context of
strong momentum for Capgemini: after releasing good H1 results, the
Group posts a 13.5% revenue growth at constant rates and perimeter in
the 2006 third quarter."
The combination of Kanbay and Capgemini creates a top-tier global
IT services firm with unparalleled domain knowledge in the financial
services vertical, seamless consulting and technology expertise, and
market leading offshore resources. Paul Hermelin and Raymond Spencer
concluded: "We believe this is a landmark transaction in the global IT
services industry. This event can fundamentally transform the
professional services industry by enabling efficient global services
delivery via an integrated single point solution delivered in a
seamless fashion resulting in a lower total cost of ownership for the
client."
Lazard Freres and Morgan Stanley acted as financial advisors to
Capgemini in connection with the transaction. Skadden, Arps, Slate,
Meagher & Flom LLP, and Latham & Watkins (as special anti-trust
counsel) acted as legal advisers to Capgemini in connection with the
transaction.
UBS Securities LLC acted as financial adviser to Kanbay and
provided a fairness opinion in connection with the transaction.
Winston & Strawn LLP acted as legal adviser to Kanbay in connection
with the transaction.
About CAPGEMINI
Capgemini, one of the world's foremost providers of Consulting,
Technology and Outsourcing services, has a unique way of working with
its clients, which it calls the Collaborative Business Experience.
Through commitment to mutual success and the achievement of tangible
value, Capgemini helps businesses implement growth strategies,
leverage technology, and thrive through the power of collaboration.
Capgemini employs approximately 65,000 people worldwide and reported
2005 global revenues of euros 6,954 million.
More information is available at www.Capgemini.com
About KANBAY
Founded in 1989, Kanbay, Inc. (NASDAQ: KBAY) is a global IT
services firm with approximately 6,900 associates worldwide. Kanbay
provides a highly integrated suite of management consulting,
technology integration and development, and outsourcing solutions
through a proven global delivery platform to clients focused on
Financial Services and Consumer & Industrial Products, as well as an
emerging presence in the Communications & Media and Life Sciences
industries. Kanbay is a CMM Level 5 assessed company headquartered in
greater Chicago with offices in North America and India as well as
London, Singapore, Hong Kong, Tokyo and Melbourne.
More information is available at http://www.Kanbay.com.
This announcement is not an offering of securities in the United
States of America or elsewhere. Securities may not be offered or sold
in the USA absent registration or an applicable exemption from
registration requirements.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of federal securities laws. Forward-looking statements with
respect to the completion of the transaction and the financial
condition, results of operations and business of the companies are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those set forth in such statements.
We can give no assurance that any projections or future results
discussed in these statements will be achieved. Readers are cautioned
not to place undue reliance on these forward looking statements and
any such forward-looking statements are qualified in their entirety to
the cautionary statements contained in this press release. Neither
CAPGEMINI nor KANBAY updates forward-looking statements and expressly
disclaims any obligation to do so.
Additional Information about the Transaction and Where to Find It
In connection with the proposed transaction, KANBAY intends to
file relevant materials with the Securities and Exchange Commission,
including a proxy statement on Schedule 14A. INVESTORS AND SECURITY
HOLDERS OF KANBAY ARE URGED TO READ THESE MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
KANBAY, CAPGEMINI AND THE TRANSACTION. The proxy statement and other
relevant materials (when they become available) and any other
documents filed by KANBAY with the SEC may be obtained free of charge
at the SEC's website at www.sec.gov. In addition, investors and
security holders may obtain free copies of the documents filed with
the SEC by Kanbay by accessing (the "Investor Relations" section of
KANBAY's website at www.Kanbay.com. Investors and security holders are
urged to read the proxy statement and the other relevant materials
when they become available before making any voting or investment
decision with respect to the proposed transaction.
Capgemini and its directors and executive officers may be deemed
to be participants in the solicitation of proxies from the
shareholders of Kanbay in connection with the transaction described
herein. Information regarding the special interests of these directors
and executive officers will be included in the Proxy
Statement/Prospectus to be circulated in connection with the
transaction. Additional information regarding these directors and
executive officers is also included in Capgemini's information
statements and publicly available reports. These documents are
available from Capgemini at www.capgemini.com, by mail at 11, rue de
Tilsitt, Paris 75017, France or by phone at 33-1-47-54-5000.