Capgemini To Grow U.S. Market Share Through iGate Deal, Digital Dominance

Capgemini wants to become one of the 10 largest solution providers in the United States by leveraging its digital initiatives and $4 billion purchase of iGate.

The Paris-based solution provider is well on its way to doing that, with global revenues climbing by 9.9 percent in the first half of 2015 from $5.57 billion to $6.12 billion, and North American sales soaring by 35.2 percent to $1.53 billion based largely on the strength of the U.S. and Canadian dollars.

Profits through the first six months of 2015 jumped 21 percent from $262 million last year to $316 million this year.

[RELATED: Capgemini To Acquire iGate To Take On Top U.S. Solution Providers]

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"The combined evolution of our geographic mix and our portfolio of offerings towards high value-added segments enables us to further improve our profitability and gain market share," Paul Hermelin, Capgemini chairman and CEO, said in a statement.

The acquisition of Bridgewater, N.J.-based integrated technology provider iGate added nearly 31,000 people to Capgemini's workforce and catapulted the company from 17th to 12th in U.S. solution provider market share. Hermelin said he's hoping to get Capgemini into the top 10 through organic growth.

The iGate acquisition was announced in late April and closed July 1.

Hermelin considers North America to be the largest and most innovative technology market in the world, and feels the company has significant growth potential in the region.

Much of that growth will come from cross-selling Capgemini offerings into the iGate customer base and vice versa since the two companies have virtually no client overlap, according to Hermelin. Boosting revenue through the iGate acquisition is a much higher priority than cutting costs, he said.

Hermelin expects iGate to be fully integrated into Capgemini by January 2016, and said the company will have a detailed integration plan in place by late September.

Capgemini plans to fuel the organic growth necessary to crack the top 10 through its blossoming digital, big data and cloud computing practices, according to Hermelin.

"This year, the fashion is digital," Hermelin said. "Last year, big data. The year before, cloud."

The company's social, mobile, analytics and cloud offerings now represent 20 percent of Capgemini's overall revenue after growing by 25 percent in the last year, which Hermelin said puts Capgemini at the vanguard of the IT industry.

Consumption of digital services is even growing rapidly in countries with soft overall IT demand, such as Holland and France, said Hermelin, who expects Capgemini's new digital customers to stick around.

Capgemini recently launched a cybersecurity business unit to assist end users in securely transforming their business to a cloud- and digital-centric model. The company also recently inked a 7-year, $200 million contract with the Georgia Technology Authority to manage IT infrastructure services for federal entities within the state of Georgia.

Capgemini has boosted its 2015 forecast to 12 percent sales growth based on the additional revenue iGate is expected to contribute.

PUBLISHED JULY 30, 2015