French State Formally Bids €410M For Atos' Slimmed-down HPC Assets

Stumbling Euro tech giant Atos looks set to finally sell its Advanced Computing assets to the French state.

The IT services megacorp, currently undergoing a complex restructuring process, said it has received a confirmatory offer from the French government to acquire the Advanced Computing business of its Eviden subsidiary, putting a value on it of €410 million ($468 million).

This is less than the €625 million ($713 million) previously mooted, owing to the decision by Atos to exclude the Vision AI biz (chiefly comprising UK-based Ipsotek, which it acquired in 2021) from the transaction.

According to a statement by Atos, Vision AI's operations contributed more than one-third of the operating margin of the Advanced Computing division, and are being repositioned as a new business unit within Eviden, as part of the Atos Group re-organization.

The updated figure also includes €110 million ($125 million) in earn-outs, meaning they are contingent on profitability indicators for fiscal years 2025 (€50 million/$57 million expected to be paid upon closing) and 2026 (€60 million/$68 million).

The carve-out of Vision AI means the Advanced Computing business is now made up of its High-Performance Computing (HPC) & Quantum functions, as well as the Business Computing & Artificial Intelligence divisions. These are not only strategically important for the state, but are expected to generate revenue of circa €800 million ($914 million) in 2025. The supercomputing division specifically builds the systems that help model the France's nuclear defense capabilities.

"Significantly, Atos has carved out its Vision AI activities from the original deal scope, retaining these higher-margin operations within Eviden. Management noted that Vision AI contributes over one-third of its operating margin, suggesting the strategic decision to preserve value-accretive assets while divesting more capital-intensive High-Performance Computing (HPC) and quantum computing operations," said TechMarketView senior research director Marc Hardwick.

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The Vision AI business unit has expertise in AI-powered video analytics for operations, safety and security, such as abandoned luggage detection, crowd management and manufacturing quality inspection.  

The disposal of the Advanced Computing business will be "material to Atos's financial profile," according to Hardwick.

"The transaction should provide crucial liquidity for Atos's ongoing transformation. The French State's involvement also underscores the strategic importance of maintaining domestic HPC capabilities, while Atos retains options in the faster-growing AI segments," he commented.

The ailing French IT biz recently detailed a four-year "strategic and transformation plan" called Genesis, intended to put Atos on a pathway to "sustainable growth" after it spent the past several years struggling with debt, declining revenues, and mounting losses, finally securing funding for a rescue plan in 2024.

It had previously failed to come to an agreement with the French government regarding the sale of the Advanced Computing assets, after a non-binding offer expired without a deal being reached.

Atos said that this time it aims to sign a binding agreement with the French state "in the coming weeks," with the transaction expected to close in 2026. ®