Capgemini to buy WNS for $3.3bn

Capgemini has entered into a definitive agreement to buy Business Process Services (BPS) heavyweight, WNS for a total cash consideration of $3.3bn. The announcement of the transaction, which is expected to be completed by the end of 2025, heralds one of the largest mergers within the IT and Business Process services market for many years. The acquisition is described by the parties as a strategic move aimed at establishing a leader in Intelligent Operations, which will be positioned strongly to address the anticipated growth in enterprise demand for Agentic AI-driven process transformation.

The deal, which will be funded from available cash of c.€1bn supplemented by debt issuance, is expected to be immediately accretive to the purchaser’s top and bottom lines. For the calendar year 2024, Capgemini and WNS generated revenues of €22.1bn and €1.2bn and delivered operating margins of 13.3% and 18.5% respectively.

The impact of the buy on Capgemini’s presence in the BPS market will be far more significant, increasing the company’s annual sales in a segment in which it has been comparatively underweight by more than 170%. The boost to Capgemini UK will be even more dramatic, lifting its non-engineering related annual business process services revenues almost fivefold to over £320m. The merger will also create substantial cross-selling opportunities. WNS has built a large blue chip client base which includes Aviva, Centrica, McCain and United Airlines

 Widespread rumours of the potential deal have been circulating for the last three months (see here) and on paper the marriage makes a great deal of sense for both organisations. Our latest Market Trends and Forecasts report (see here), anticipates that the growth in BPS demand will remain subdued for the foreseeable future. Enterprises will increasingly channel their energies and investmnets into fundamentally re-imagining process delivery through the deployment of Agentic AI-assisted solutions capable of tackling complex, industry specific challenges. The bringing together of Capgemini’s formidable IT transformation capabilities and WNS’s substantial horizontal and vertical business process expertise establishes a strong foundation from which to capitalise on this market shift.

Both companies have also been making fast progress in building out their AI propositions. We have identified Capgemini as one of the Leading Pack of service suppliers  on The Road to AI and WNS has been quick to turn its attention to the potential of AI/Gen AI, with both a range of use cases rolled out to date and through the development of a number of domain focused solutions (see here). Whether the new whole can be made to be more than the sum of its parts remains to be seen. The success of the merger will not, however, be limited by a lack of interest in what it is aspiring to offer.

Posted by: Duncan Aitchison at 10:14

Tags: acquisition   bps   AI   IT+services   AgenticAI