Le Plessis, July 28, 2022
- Agreement between the reference shareholders of CS GROUP and Sopra Steria for the acquisition by Sopra Steria at a price of €11.50 per share of 16,033,493 ordinary shares representing a total of 65.26% of CS GROUP’s share capital. These shares would be added to the 9.80% already held by Sopra Steria
- The acquisition in cash of these shares would lead to the filing by Sopra Steria of a simplified public tender offer with the Autorité des Marchés Financiers
- Accelerating the Vision 2024 strategic plan
- Leveraging growth in Defence & Security, Space and Energy sectors, particularly nuclear power
- Strengthening positions in cybersecurity and the aeronautics market
- Strengthened position in digital sovereignty and confidence
- Completion of the transaction envisaged at the end of the first quarter of 2023
CS GROUP, a prime contractor for mission-critical systems, announces that Sopra Steria has entered into exclusive negotiations with a view to acquiring, at the price of €11.50 per share, all the CS GROUP shares held by the company’s Chairman of the Board of Directors Yazid Sabeg, Chief Executive Officer Eric Blanc-Garin, and their joint holding company Duna & Cie, representing around 29.73% of the share capital of CS GROUP (“mainblock”). In parallel with this, CIRA Holding and founders of Novidy’s have granted Sopra Steria a commitment to sell all of the shares of CS GROUP that they own, i.e. approximately 29.15% and 6.38%, respectively, in the company’s share capital (“other blocks”), representing a total, including the acquisition of the “main block”, of 65.26% of the share capital of CS GROUP. This operation would bring the entire share capital held by Sopra Steria, when taking into account the 9.80% already owned, to 75.06% of the capital of CS GROUP.
The acquisition of these shares would lead to Sopra Steria filing a proposed simplified public tender offer (OPA simplifiée) with the Autorité des Marchés Financiers in Q1 2023. The transaction, for 100% of the share capital, would amount to €282.5 million1, without taking into account €3.2 million in net debt2.
 including treasury shares
2 The change from equity value to enterprise value includes debt (including the impact of IFRS 16), factoring, cash adjusted for treasury shares and CS GROUP’s R&D tax credit as published in the 2021 URD
The Boards of Directors of Sopra Steria Group and CS GROUP, which have already been consulted, have each reacted unanimously in favour of this transaction, without prejudice to a review of the documentation of the public offer when it becomes available, and to the reasoned opinion to be formulated by the Board of Directors on the public tender offer after receiving the independent exper t’s opinion in the event that the acquisition of the “main block” and the “other blocks” is completed. To this end, the Board of Directors of CS GROUP has set up a committee comprising Ms. Edwige Avice, Ms. Catherine Euvrard, Mr. Jean-Marc Georgin and Mr. Blaise Jaeger, which intends to propose the nomination of Finexsi as independent expert to attest to the fairness of the public offer.
Information and consultation procedures with the employee representative bodies of Sopra Steria and CS GROUP will be initiated.
Eric Blanc-Garin, Chief Executive Officer of CS GROUP, commented:
“CS GROUP supports its customers in highly sensitive sectors in the design and implementation of their critical systems, aiding them in conducting operations in the context of their most demanding missions in terms of availability and security. To this end, CS GROUP implements innovative and sovereign solutions. Our core business revolves around information and communication systems, focused on the operational challenges of our customers in the Defence & Security, Space, Aeronautics and Energy sectors, with high constraints in terms of cybersecurity and data intelligence. This merger with Sopra Steria would be a formidable lever for accelerating our development strategy and would enable us to amplify the objectives of our Vision 2024 plan thanks to the
Sopra Steria’s size and additional skills, combined with CS GROUP’s DNA of creativity and innovation, would open up new strategic and commercial capabilities and perspectives to effectively address major security and sovereignty challenges. »
Cyril Malargé, Chief Executive Officer of Sopra Steria Group, commented:
“The tie-up between Sopra Steria and CS GROUP would create a benchmark player in digital services and engineering, a prime contractor for critical systems in the fields of defence & security, space, and nuclear energy. It would also strengthen our position in aeronautics and cybersecurity. Furthermore, it would confirm our positioning in digital sovereignty and trust supporting our major European public- and private-sector clients. Lastly, it would position us well in verticals which, in light of the geopolitical and energy situation, offer a very strong growth outlook over the coming years. With defence and aeronautics already among our top- performing businesses, CS GROUP’s skills and expertise would act as a powerful driver to accelerate the Group’s development. I’m delighted by this planned tie-up, which would help us offer our clients even more value, and am looking forward to welcoming CS GROUP’s employees to Sopra Steria Group, where I hope they will find attractive prospects if the transaction is completed.
Acceleration of the Vision 2024 Plan in the fields of defense & security, space and energy
As a prime contractor for mission-critical systems, CS GROUP benefits from recognized expertise and innovative and established technological solutions, making it a preferred partner for players in its most sensitive and advanced sectors. The merger between CS GROUP and Sopra Steria would accelerate the implementation of the group’s Vision 2024 strategic plan in these areas. It would create a powerful player in technological and scientific engineering with recognized expertise in systems of command and control, secure communications, logistics information and cyber defence. CS GROUP would also contribute its own high-tech solutions: counter-drone solutions, combat training systems, tactical data management, maritime surveillance and perimeter security, geo-information and image processing, data intelligence and AI, hardened operating systems and embedded secure systems, among others. These solutions are backed by cutting-edge R&D expertise, a vast network of connections to universities and research centres, and renowned industrial partners.
The alliance between the two groups would also enable them to develop, on a European basis, a strong competence in space systems and applications, by becoming one of the European players in space information systems. For over 40 years, CS GROUP, which is among the top European players in spatial computing, has taken an end-to-end approach to all the business lines involved in space systems, throughout their entire life cycle.
In addition, the alliance between CS GROUP and Sopra Steria would concentrate significant expertise that is complementary to that of French industry in the field of nuclear energy (CS GROUP’s historical sector), particularly in the sensitive areas of neutronics engineering, digital simulation, operating safety, instrumentation, industrial architecture, PLM, and command and control.
In the industrial sector, the new entity would become a reference partner for the digital transformation of its customers, thanks to all its technical skills.
Strengthening of positions in cybersecurity and the aeronautics market
With more than 200 experts, CS GROUP is favorably positioned as a key player in the field of cybersecurity for corporate, industrial and sovereign information systems. This merger would accelerate the group’s deployment, particularly in the field of managed services and data management. This merger would contribute to accelerating the development of resources in this essential and promising field of cybersecurity.
Thanks to this operation, CS GROUP and Sopra Steria would establish themselves as a key player in the field of sovereignty and digital confidence for their European customers.
In the field of aeronautics, one of Sopra Steria’s historical markets, CS GROUP is recognized as an expert in the most demanding embedded systems in terms of security. This alliance will enable the Group to considerably increase its international strength in the sector and accelerate its development in the field of autonomous systems.
A sovereign and innovative player in a context of growing security and independence issues
Renewed international geopolitical tensions and the increased risk of conflict will lead many states, particularly in Europe, to scale up their investments in defence and security, not only on land, sea and air but also in space and the cybersphere. There will be a rapid surge of growth in these new global security priorities, particularly in light of the new communication capabilities that will be provided by upcoming satellite constellations. The interoperability and security of critical operational systems for exchanging vital real -time information will become increasingly essential.
In the current geopolitical context, energy independence is also becoming a growing priority. Combined with the need to transition to more sustainable energy sources and reduce greenhouse gas emissions, these priorities will boost investment in nuclear power. In France, for example, the new government would like to relaunch the country’s nuclear programme with the construction of 6 new EPRs.
Transaction features and schedule
The final agreement in respect of the acquisition of the “main block” and the fulfilment of commitments pertaining to the acquisition of the “other blocks” shall not be finalised until the procedures for informing and consulting with applicable employee representative bodies at CS GROUP and Sopra Steria have been completed.
Completion of the transactions with the “main block” and the “other blocks” remains subject to the customary consultations, and, in particular, requires prior regulatory approval both in France and abroad. It would be expected to close in Q1 2023.
The purchase price for the “main block” and the purchase price for the “other blocks”, which would be paid in full in cash, has been set at €11.50 per share.
Subject to completion of the acquisition of the “main block” and the “other blocks”, Sopra Steria would launch a public tender offer for the outstanding CS GROUP shares at the purchase price applicable to the “main block” and the “other blocks”, namely €11.50 per share, which would equate to a premium of 74.69% above the volume-weighted average price of CS GROUP shares over the month to 27 July 2022 and a premium of 68.57% above the volume-weighted average share price over the last 60 trading days.
The total amount of the transaction would come to €282.5 million, before taking into account €3.2 million in net debt.
The proposed public tender offer would need to be filed in early Q1 2023 and would potentially be followed by a mandatory delisting (retrait obligatoire).
The transaction is expected to be finalised by the end of Q1 2023.
It should be noted that Sopra Steria already holds 9.80% of CS GROUP’s share capital to date.
About CS GROUP
CS GROUP is a major player in the design, integration and operation of mission critical systems. CS GROUP is listed on the Euronext Paris – Compartment C market (Shares: Euroclear 7896 / ISIN FR 0007317813). For more information, visit us at: www.csgroup.eu
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About Sopra Steria
Sopra Steria, a European tech leader, renowned for its consulting, digital services and software development, helps its clients drive their digital transformation and obtain tangible and sustainable benefits. It provides end-to-end solutions to make large companies and organisations more competitive by combining in-depth knowledge of a wide range of business sectors and innovative technologies with a fully collaborative approach. Sopra Steria places people at the heart of everything it does and is committed to putting digital to work for its clients in order to build a positive future for all. With 47,000 employees in nearly 30 countries, the Group generated revenue of €4.7 billion in 2021.
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Sopra Steria (SOP) is listed on Euronext Paris (Compartment A) – ISIN: FR0000050809
For more information, visit us at www.soprasteria.com
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