Capgemini acquires digital consulting services firm RXP
Capgemini is set to add more than 500 professionals to its Australian outfit, having laid the groundwork to acquire ASX-listed technology and digital marketing firm RXP Services. The total consideration is estimated at more than $95 million.
RXP’s end-to-end offering spans strategy, branding, experience design, data analytics, digital transformation and project management services, all of which align firmly with Capgemini’s proposition. The acquisition will also bring something new to the table: RXP has a dedicated branding, design and customer experience agency – ‘The Works.’
For Capgemini, the move marks growth in scope and scale. RXP is headquartered in Melbourne, with additional offices in Sydney, Canberra and Hobart. This 550-strong team – specialised in key digital offerings such as Microsoft, Salesforce and ServiceNow – will now integrate with 4,000 plus employees at Capgemini Australia, while joining a global outfit of more than 250,000 professionals across 50 countries.
Given a growing digital focus in the market, French-headquartered Capgemini has increasingly been targeting clients in Australia. The RXP move marks the second acquisition this year, having previously purchased Sydney-based MuleSoft consultancy WhiteSky Labs in March. According to executive Chairman at Capgemini in Asia Pacific (APAC) & Middle East Luc-Francois Salvador, the latest drive “illustrates Capgemini’s growth ambition in Asia Pacific.”
“The acquisition of RXP Services will make Capgemini a market leader in Australia in digital, data and cloud, enhancing our ability to provide our clients with value, scale and world-class expertise,” he added. Digital transformation was already in the spotlight for Australian businesses in the lead up to this year, while the Covid-19 crisis has made it a means to recovery amid virtual working conditions and the need for efficiency.
Combined with RXP’s unique experience and expertise, Capgemini is positioning itself to meet this surge in demand. And its not just the capabilities that align between the two, it’s the values as well.
“At RXP Services we believe its critical that digital consultancies focus on the people aspect of technology-enabled solutions, hence Capgemini’s conviction that the value of technology comes from and through people is very complementary to our beliefs,” explained co-founder & CEO at RXP Ross Fielding.
Deal specifics
Given RXP’s publicly-status, Capgemini’s move to acquire comes via a statutory shareholder approved process – ‘Scheme.’ As a result, the deal remains subject to approval from shareholders, as well as from the courts and regulators, while a number of other customs and conditions also must be satisfied. Capgemini doesn’t expect to finalise the deal before early next year.
That being said, both firms have agreed on the deal, and RXP leadership has urged shareholders to consider the value in such a deal and vote in favour of the move. "In addition to the natural fit, joining Capgemini would offer a larger scale and capability for our RXP Services teams to deliver end to end solutions that our clients need and want, with the option to expand them globally,” said Fielding.
“The RXP Services board and I unanimously recommend that RXP Services shareholders vote in favor of the Scheme in the absence of a superior proposal and subject to the independent expert concluding (and continuing to conclude) that the Scheme is in the best interests of RXP Services shareholders.”
With well over 170 million shares and more than 450,000 performance rights, the total consideration for 100% of RXP’s share capital comes to just over $95 million. Despite reporting a shaky start to this year, RXP posted revenues of nearly $130 million as of June this year, which makes it an attractive proposition for Capgemini.
