What acquiring Empired could do to Capgemini’s local revenue

Capgemini is set to acquire Perth-based systems integrator and Intergen parent Empired to further its reach in Australia and New Zealand, a move that could see the French multinational boost its local annual revenue to more than half a billion dollars.

On 19 July, Empired announced it had entered into an agreement to be acquired by Capgemini at a price of A$1.35 per share, coming to a total of A$223 million. 

While based in Australia, Empired has a substantial presence in New Zealand thanks to local player Intergen, which it acquired in 2014. 

While the finer details of the acquisition are yet to be disclosed, the French systems integrator would add a pretty penny to both its top line and bottom line financials if successful in its bid. 

Capgemini Australia, which is understood to also oversee the company's New Zealand activities, pulled in revenues of $417.7 million in its last full financial year for the 12 months to 31 December 2020.

The publicly listed Empired, meanwhile, reported A$165.5 million in revenue during its last financial year, the 12 months to 30 June 2020, with A$98 million of this from Australia and A$67.5 million from its New Zealand business.

Whether all of Empired’s operating markets would be included in Capgemini Australia's future results is unclear at this stage, but simply adding the systems integrator's Australian operations revenue into the mix could see the combined entity's annual revenue rate come to A$515 million — a 23.5 per cent boost to Capgemini Australia's most recent annual tally. 

If all of Empired's revenue is thrown into the mix, Capgemini would see its combined revenue increase to A$582.5 million — rising by nearly 40 per cent on top of its last full-year tally. 

At the same time, Capgemini Australia brought in A$9.7 million in net profit after tax during its 2020 financial year. Empired, meanwhile, made A$6.1 million in its FY20 during the 12 months to 30 June 2020.  

This means the acquisition could see Capgemini Australia’s profit rise by 63 per cent to a combined value of A$15.8 million.

It should be noted that Empired’s post-tax profit combines both of its markets across the Tasman and does not provide a breakdown between the markets in which it operates.

According to Capgemini's Kaylene O’Brien, managing director for Capgemini A/NZ, the acquisition, if successful, would see the French company expand its presence in Australia and New Zealand further, through the brands Empired and its Kiwi subsidiary Intergen, respectively. 

However, there is also a chance for it to bolster its standings in the US as well. 

The Perth-based systems integrator’s FY20 results indicate that it has approximately 1,000 employees across Australia, New Zealand and the US, with the latter two markets operating as one segment. 

Regardless of the potential extent of the boost in profit and revenue from an acquisition of Empired, the reality is an increase in finances won't be seen until much later in the year if the acquisition is successful, as the scheme meeting for the acquisition is slated for early November and implementation is predicted to take place in mid November.