Finnish IT software and service company Tieto announced plans to acquire Evry, a Norwegian information technology company for £1.2 billion. The acquisition comes in an effort for the latter to penetrate into the Nordic IT market. Tieto will establish a Nordic digital consultancy offering services such as cloud solutions and robotics among others. For years, it has been perceived as a potent buyer of Evry, according to media reports. The new merged venture will be established in Espoo, Finland.
Tieto board member Jonas Synnergren said, “The transaction is a natural step in the ongoing consolidation of the Nordic IT-services market.” The venture is anticipated to generate annual revenues of £2.7 billion. That said, it also plans to reduce costs by £75 million each year through layoffs and other cost-cutting measures. Most of the venture’s cost-cutting activities will be completed by the end of 2022.
Under the terms of the agreement, Evry’s owners will have a 37 percent stake in the venture and cash of approximately £200 million, the media reports said. Private equity firm Apax Partners will be the largest shareholders with 20.4 percent stake in the venture, followed by Cevian Capital with 9.4 percent.
The deal necessitates support from two thirds of shareholders in each company. The venture will hire 24,000 employees.
Synnergren said, “The industrial logic for the merger is very strong, creating a clear leader in the Nordic market with local presence, scale and a broad product and competence portfolio.” If the merger becomes successful, it will boost ‘value creation’ for Tieto’s strategy over the next five years.
The transaction is expected to be completed in the last quarter of 2019, or during the first quarter of 2020, both companies said.