Orange to Buy Systems Integrator in $69.7M Deal

Orange says it is in exclusive talks to acquire a controlling stake in a systems integrator called Business & Decisions (B&D) as it looks to beef up its data intelligence capabilities.

Employing about 2,500 people in France and around the world, B&D develops business intelligence and customer relationship management systems, which have caught the interest of Orange Business Services (OBS), the French telco's enterprise division.

Orange (NYSE: FTE) reckons a B&D takeover will strengthen its activities in data governance and data analysis as it expands outside its traditional connectivity market.

OBS would initially buy a 67% stake in B&D from its majority shareholders -- the Bensabat family and managing director Christophe Dumoulin -- for a cash fee of €7.93 ($8.84) per share.

Following that, it plans to launch a public offer also priced at €7.93 ($8.84) per share for the remaining B&D shares.

That offer price represents a 34% premium compared with the average share price of B&D over the past year, and values the company at about €62.5 million ($69.7 million).

Trading in B&D shares was suspended on May 8 following press speculation on May 5 about a takeover deal.

"We are convinced that the combination of Business & Decision's expertise in data and business intelligence and our dual know-how as an operator and service integrator will be a key level that will enable us to accelerate the digital transformation of our enterprise customers and stimulate growth," said Thierry Bonhomme, Orange's deputy CEO in charge of OBS, in a company statement.

B&D might also complement some of the other investments that OBS has been making in so-called "big data" technologies.

It has already rolled out a big data offering called Flexible Data based on an internally developed data management platform known as Datavenue.

OBS has been using such technologies to support the development of various smart-city services: In one project, for instance, it has been analyzing "flows of population" within specific locations, such as retail outlets or concert venues. (See Orange's Olivier Ondet Aims for IoT Supremacy.)

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By taking advantage of B&D's systems integration skills, OBS could also strengthen Orange Applications for Business, its existing systems integration division, and reduce its need for partnerships with external integrators in some geographical markets.

Dumoulin said the takeover would give B&D a chance to address new markets.

"It is an opportunity for Business & Decision and its teams to deploy our expertise in new markets in France and internationally, and to continue to invest and innovate in data-driven technologies," he said in a statement.

Orange's current focus on integration services is unsurprising given the recent financial performance at OBS.

In the first three months of this year, revenues from IT and integration services were up 2.6%, to about €510 million ($569 million), compared with the year-earlier period, and accounted for about 28% of the total.

By contrast, revenues from voice, data and mobile services shrank 3.7%, to about €1.3 billion ($1.45 billion).

Orange hopes to complete the takeover by the end of September 2017.

The French telco's share price was up 0.5% in Paris at the time of publication.

— Iain Morris, , News Editor, Light Reading