French IT supplier Atos is looking to fully separate its Eviden and Tech Foundations Co (TFCo) brands, selling off the latter.

– Atos

Announced August 1, TFCo is set to be bought for €2 billion ($2.2bn) by EP Equity Investment (EPEI) for a 100 percent acquisition.

The announcement comes after last year's decision for Atos to divide its services in a two-way split. Eviden was made up of the digital, security, and big data business, while TFCo was data center, hosting, digital workplace, and business process outsourcing.

According to Atos, this latest update is the final stage of its plans to complete the full separation of the two, and TFCo will be transferred to EPEI for €100 million ($109 million) plus €1.9 billion ($2.09 billion) of the division's debt.

The deal is expected to go through by the end of 2023/ start of 2024 but remains subject to approval from relevant bank creditors. TFCo will continue to use the Atos brand and will become its sole owner, while the remainder of Atos will be renamed Eviden SE.

Bertrand Meunier, chairman of Atos' board of directors, said: "In consistency with our announcements of June 2022, we have decided to present to our shareholders vote, the separation of the Group through the divestiture of TFCo, our legacy business, together with its liabilities.

"This will create value for our shareholders by both taking away the risk of TFCo’s turnaround and its various liabilities and refocusing Atos on Eviden and its good future growth prospects. We will hold an Investor Day on Eviden before our shareholders’ vote.”

Should the deal be approved, EPEI will also receive a 7.5 stake in Eviden.

According to Megabuyte analyst James Preece, this decision is the complete reverse of what Atos initially suggested. At the time of the company's restructuring, Atos was expecting to spin out Eviden, not the other way around.

"In the event, it swatted away various private equity and trade interests but is now recommending an offer that values the legacy infrastructure-focused business at a relatively meager 3.9x EBITDA but more importantly retains the relative crown jewel in Eviden," said Preece.

For the rest of 2023, Atos/Eviden is aiming for increased growth compared to last year and to get this to 7 percent annual growth between 2022 and 2026.

In the midst of this news, Atos also snuck out a press release revealing its new CFO - Paul Saleh. Saleh is taking over from Nathalie Sénéchault, and was previously CEO of Gainwell Technologies.