© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
June 26, 2011 6:44 pm
Capgemini, the European IT services company, is looking for a string of acquisitions to bolster its position in the US market, with a particular interest in the healthcare sector.
Paul Hermelin, chief executive, said in an interview with the Financial Times he was looking for a “string of pearls” to help propel Capgemini into the top 10 in the US IT services market.
He said: “We are a marginal player in several of the key markets [in the US]. For instance, we are non-existent in healthcare in the US, which I think is a mistake. So we need acquisitions,” he said.
“We must get into the top 10. I don’t think of the top five yet, but we think we’ll have to go for [a] string of pearls . . . dedicated to the US market.”
Mr Hermelin has been looking to expand in the US for some time, but the economic downturn hit spending plans. Now that banks and large businesses have resumed spending on IT projects, the company is willing to invest in rapid expansion.
Many technology companies have been eyeing the US healthcare market, as surgeries and hospitals are moving towards using electronic records for patients. In 2009, the US government earmarked economic stimulus money for this.
A US deal for the company would follow more than €600m ($852m) of spending on deals in the past year. Capgemini had a war chest of about €1bn at the beginning of 2011, and aims to spend much of this on such transactions.
Last week, Capgemini announced a deal to buy Praxis, a Chinese company that provides IT services for the utility market. Though small, the transaction will help build up Capgemini’s presence in the region.
Gilles Taldu, head of new business models, said Capgemini was still looking for midsize acquisitions in China. The company had pursued another Chinese deal earlier this year, but failed to secure it. “We have a strong ambition in China. We believe we can have organic growth of around 30 per cent and at the same time will make acquisitions,” said Mr Taldu.
Last year, Capgemini also bought a majority stake in CPM Braxis in Brazil for €233m, as part of an expansion into emerging markets. It has also made several small acquisitions in France this year, and last month spent €382m on buying Prosodie, a French internet and telecoms services company.
Capgemini has also boosted organic growth, hiring 30,000 new staff last year, nearly half of whom are in emerging markets.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in