Paris has offered $500 million for the “Advanced Computing” segment of Atos' BDS unit, in a narrower offer than a June proposal, which expired.
The offer is the latest gambit in a complex set of offers, refinancing, and asset disposal taking place across the sprawling French IT outsourcing giant, which has spiralled into ever-deeper crisis over the past two years.
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A “previous non-binding offer sent by the French State was on a wider perimeter including Mission Critical System and Cybersecurity Products businesses” Atos admitted this morning (Monday, November 25).
The new offer “regroups the High-Performance Computing (HPC) & Quantum as well as the Business Computing & Artificial intelligence divisions,” said Atos. “The business currently employs approximatively 2,500 employees and generated revenue of circa €570 million in 2023.”
Atos refinancing: Plans approved
In late October a court agreed that Atos will receive up to €1.7 billion of new money by the beginning of 2025 to help fund a restructuring.
Atos in March had flagged critical “risks associated with its refinancing” and warned that it will need to “implement a major asset disposal program” if it cannot raise money from banks or the markets.
The company had been close to bankruptcy. As Bloomberg reported last month: "The plan will see creditors take control of the company and wipe out existing shareholders. It includes €2.9 billion of loans and bonds converted into equity and new financing from creditors."
A load of Bull
HPC is one of the fastest growing activities of Atos, delivered under the brand Bull, the company said earlier this month.
It worked with CEA on Tera 100, the first petaflops-scale supercomputer ever designed and developed in Europe, which was turned on in 2010, and the two have since been working on the Tera 1000 co-design programme – preparing for the "implementation of an exascale-class supercomputer."
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On November 8, Atos emphasised that this Bull subsidiary had "issued today a preferred share (action de préférence) for the benefit of the French State to protect national interests in respect of certain activities..."
"The French State benefits from governance rights at the level of Bull SA... and prior authorization and approval rights (droits d’autorisation préalable et d’agrément) designed to protect sovereign sensitive activities."
Paris's involvement has heavily complicated Atos's disposals and restructuring activities, even has it spiralled further into crisis.
CEOs galore have jumped ship
A second Atos CEO in just nine weeks quit the embattled French technology company ahead of the March restructuring news – with veteran Nourdine Bihmane abandoning ship after 23 years at the company
Bihmane cited a “strategy misalignment” for his decision, adding in a LinkedIn post that “as you can imagine, this was a hard decision to make.”
Bihmane, who was CEO of Atos Tech Foundations, follows group CEO Yves Bernaert out the door. Bernaert lasted just four months before quitting in January, citing a “difference of opinion on governance” for his reason.
Atos in October named Philippe Salle as its seventh CEO in three years.
Former CEO: Hyperscalers ate our lunch
Atos's net losses tripled to over €3 billion in 2023, an annual report showed – with €223 million in restructuring costs; €382 million in "one-off separation and transformation costs" after it split the company into two units, and €47 million of "rationalization cost resulting from the closure and consolidation of data centers" further hitting the company.
In 2022 then-Atos CEO Nourdine Bihmane exclusively told The Stack: “We have been totally disrupted by the public cloud over the past ten years.
“It started with cheap storage, moved to compute, then additional services like firewall services, network services, databases services…
“We have been really resisting that. But we saw our market share reduce and then the hyperscalers have taken more and more of our infrastructure, also on the application side,” he emphasised in an interview in London.
“One of the first paradigms I wanted to change was [the one in which we are a] victim of the hyperscalers; trying to resist them.”
The French state in June offered to buy the company’s supercomputers and cybersecurity services in a larger €700 million bid that expired in October.
Atos said today (November 25) that it will also launch a formal sale process for these remaining parts of its BDS unit, including what it calls “mission-critical systems” and its cybersecurity offering.
Don't be entirely surprised if Paris comes knocking again.
