Airbus Bids for 30% Stake in Atos' Evidian Security BusinessDeal Would Strengthen Evidian's Hand in Cloud, Advanced Computing, Digital Security
Airbus has made a formal offer to purchase a 29.9% stake in Atos' $4.8 billion Evidian cybersecurity, big data and digital business.
The Paris-based conglomerate says it will conduct due diligence and initiate negotiations with the Dutch aircraft manufacturer focused on both Airbus' offer and a long-term strategic and technological partnership between the two organizations. Airbus says it won't grant any exclusivity to Atos and remains open to offers from other parties capable of supporting a major financial and industrial project (see: Report: Airbus Eyes Minority Stake in Atos Security Business).
"Airbus' interest in becoming an anchor shareholder is an acknowledgement of Evidian's unique capabilities in an increasingly complex digital environment with heightened security challenges," says Bertrand Meunier, chairman of the Atos board of directors. "Through this proposed large-scale partnership, we would accelerate Evidian's industrial project and future growth while ensuring technical sovereignty."
Investors in Atos reacted favorably to Airbus' offer, sending the company's stock up 17.5%, or $2.20, to $14.83 per share in trading since the bid was revealed before the market opened Thursday. Similarly, Airbus' stock is up 5.5%, or $7.06, over the past two days, to $134.41 per share. Airbus said its revenue increased by 12.9% in 2022, to $62.89 billion, and reported annual earnings of $5.78 per share.
Catalyzing Cross-Sell Opportunities
Atos intends to stand up Evidian as a separate, publicly listed company by the end of 2023 and has said it intends to use proceeds from selling partial ownership in Evidian to bankroll its transformation plan for Atos' $6.99 billion infrastructure and data management business as well as its $4.38 billion business and platform solutions unit. Atos will maintain up to a 30% stake in Evidian following the separation.
"There's a lot of complementarity and synergies with what Evidian is doing."
– Guillaume Faury, CEO, Airbus
Neither Atos nor Airbus disclosed how much Airbus offered to pay for the nearly 30% stake in Evidian. Atos in September rejected a $4.12 billion offer from rival Onepoint to acquire Evidian outright. Atos values Evidian at about $7.49 billion, including a $3.21 billion debt, a source familiar with the matter told Reuters (see: Atos Rejects $4.12B Onepoint Bid for Cybersecurity Business).
“The worlds in our businesses - be it commercial aviation, defense, space, helicopters - will be very much enabled by data, big data, connectivity, cloud-based solutions, connected objects in a cyber secure environment,” Airbus CEO Guillaume Faury said during an earnings press conference Thursday. “So there's a lot of complementarity and synergies with what Evidian is doing.”
Having Airbus as an anchor shareholder with a long-term strategic and technological agreement would strengthen Evidian's European leadership and reach in cloud, advanced computing, digital security and digitization, according to Atos. The investment would allow Airbus and Evidian to generate cross-selling opportunities and enter into new markets such as secure cloud, data management and security, he says.
Leading the Way in Managed Security Services
Combining Airbus' capabilities with Evidian's expertise in managed security services and supercomputing would create a unique European entity across cybersecurity, public safety, critical national infrastructure and digitalization of the defense sector, according to Atos. Gartner in April recognized Atos as the world's largest managed security services vendor after it grew its practice by 20.9% in 2021.
Revenue for Atos' Evidian business in the first half of 2022 inched up to $2.49 billion, just 2% higher than the $2.44 billion the year prior on a constant currency basis, thanks to above-market growth from the company's cybersecurity practice. Evidian has 50,000 employees focused on its $3.43 billion digital transformation business and 9,000 employees serving its $1.38 billion big data and security practice.
Airbus has three divisions: a $44.31 billion commercial aircraft business, which grew by 15% in 2022; a $12.04 billion defense and space business, which grew by 11% in 2022; and a $7.54 billion helicopter business, which grew by 8% in 2022. Cybersecurity has been part of Airbus' defense and space unit and includes security operations centers, incident response services and cryptography for NATO countries.
Airbus also operates a 400-person cybersecurity subsidiary in Europe called Stormshield that sells data, endpoint and network security technology. Airbus last year said it would increase Stormshield's research and development activities to enrich the company's portfolio in network security, data encryption and endpoint detection and response (see: Airbus Sets Up Cybersecurity-Focused Organization).