Kanbay International — Merger or Acquisition (October 2006)
27 slides from Kanbay International's merger presentation, Oct 26, 2006
Slide 1: Capgemini Acquires Kanbay
Capgemini Acquires Kanbay Accelerate implementation of global strategy
Slide 2: Forward-Looking Statements
Forward-Looking Statements FORWARD-LOOKING STATEMENTS This slide presentation contains forward-looking statements that are subject to risks, uncertainties and other factors that could be deemed forward-looking statements and could cause actual results to differ materially from those referred to in t
Slide 3: Strategic rationale
Paul Hermelin Capgemini CEO Strategic rationale
Slide 4: Transaction Highlights
Transaction Highlights 100% cash acquisition of NASDAQ listed Kanbay, leading IT firm focused on Financial Services and Consumer Product with 6,900 employees (5,000 in India) Total consideration of US$1.25 billion based on shares outstanding, warrants, restricted shares and vested stock options at y
Slide 5: Transaction Rationale
Transaction Rationale Revenue synergies through strong domain expertise in Financial Services & Consumer goods Operational and Tax cost synergies Cultural and managerial fit Great Management Team Simple integration model Accelerate top line growth EPS accretive: mid single digit in 2007 and low doub
Slide 6: Capgemini's strong momentum
Capgemini’s strong momentum Bookings €1523M (+20%) Q3 demonstrates strong performance and market strength Turnaround completed Strong financial performance as demonstrated by H1 results Resilient business model Revenue €1881M (+13.5% organic) Operating Margin 4.8% (+3 points) Net cash position €789M
Slide 7: Capgemini's ambition
Capgemini’s ambition 3 Deliver 8% in 2008 and then push to at least 10% Increase resilience at the bottom of the cycle Sustain growth above market i ndustrialization with a significant growth in offshore (35,000 employees in 2010) and investment in productivity improvement i nnovation with a strong
Slide 8: Kanbay is a perfect strategic fit
Kanbay is a perfect strategic fit 3 i ndustrialization i nnovation i ntimacy Reinforces our North American presence Strengthen our Indian platform Consolidate Financial services & Consumer product position and domain expertise with key client references Accelerate implementation of global seamless d
Slide 9: Overview
Overview Raymond J. Spencer Kanbay CEO
Slide 10: Kanbay, a leading sector focused IT services firm
London Dublin Hong Kong Singapore Melbourne New York Atlanta Boston Miami Tampa Phoenix Washington, DC Chicago Global Headquarters Office Offshore delivery center Data center Founded in 1989; US headquarters with 16 locations Adjoined acquisition in March 2006 Approximately 6,900 professionals (5,00
Slide 11: Solid financial track record
Solid financial track record Revenue ($ mm) Revenues: $114M Kanbay standalone +33% revenue growth Y on Y Kanbay standalone operating margin: Q1 16,9% Q2 14,6% Q3 16,4% EPS of 23 cts/share (+32% sequential) 40 new clients Q3 Results 2006 E 2005 2004 2003 2002 Operating profit before employee stock co
Slide 12: Kanbay is focused on high value solutions
Kanbay is focused on high value solutions Revenue by Service H1 2006 Revenue by Geography H1 2006 Consulting 5% Development & Systems Integration 55% Application Maintenance 29% Testing 6% Outsourcing 5% Asia 6% North America 89% Europe 5%
Slide 13: Strong Sector Focus and Client Base
Strong Sector Focus and Client Base 4 of the world’s largest 5 credit card issuers 3 of the world’s top 5 banks 4 of the top 5 bulge bracket firms 1 of the 4 largest global insurers Kanbay industry leaders average 15-20 years of industry expertise 4 of Top 10 Processed & Packaged Goods Manufacturers
Slide 14: Innovation through deep domain expertise
Innovation through deep domain expertise Mortgages & Lending Process improvement & automation Customer Loyalty programs for payment systems Alternate Cards (Debit, Smart & Co-branded) Branch renewal STP & CRM Treasury & Cash Management Straight Through Processing, billing, pricing & risk reporting C
Slide 15: Intimate relationship with HSBC
Intimate relationship with HSBC Kanbay’s relationship with HSBC is the largest and longest IT services outsourcing partnership in the financial services sector Established relationship with Household Financial in 1990 Nearly 2,400 Kanbay associates are integrated into HSBC’s global IT organization P
Slide 16: Next-generation value-based global delivery model
3 rd generation Delivery Model Strategic alignment with client business Integration of industry and technology expertise for innovative business focused solutions Value-based delivery model Self-enriching knowledge base Value-Based Global Delivery Model Integrated Global Delivery Model Basic Global
Slide 17: Capgemini is the ideal partner for Kanbay
Capgemini is the ideal partner for Kanbay Attractive for Kanbay shareholders Enhancing for clients and associates Cultural fit Career opportunities for associates Value based Global Delivery Model Complementary Leverage strong domain expertise and FS India platform across a larger number of clients
Slide 18: A powerful combination
a powerful combination Paul Hermelin Capgemini CEO Nicolas Dufourcq Capgemini CFO
Slide 19: 12,000 employees in India by end 2006
12,000 employees in India by end 2006* Mumbai (4,200) Hyderabad (1,900) Chennai (400) Bangalore (1,800) Kolkata (300) Pune (3,400) 16 % of Group employees in India Leadership Position in IT 3 rd non Indian Player 9 th Player overall Secure Ramp-Up 31% CAGR to reach 35,000 employees by 2010 Increase
Slide 20: Strengthening Leadership in Financial Services
Strengthening Leadership in Financial Services Financial Services represents 22% of IT market: €70bn €1,000M* Mainly Europe €250M* Mainly NA €1,250M + 25 % growth Global FS Geography Revenues Leadership Position Mortgages & Lending Customer LoyaltyInsurance underwriting & Billing Trading Systems Ass
Slide 21: Reinforcing North America position
Reinforcing North America position Strongly committed to the development of North America Strong results in CS / TS: 7.8% revenue growth YTD Positions North America for growth Resilient economic model Consolidates CS / TS base: +45% revenue in H1 2006 after consolidation Reinforce Management Team Ex
Slide 22: Integration approach focused on delivering growth
Integration approach focused on delivering growth Preserve and leverage Kanbay deep domain expertise and growth momentum Speed up integration by creating a Financial Services BU covering NA + UK + FS India Led by Raymond Spencer reporting directly to Capgemini CEO Financial Services India Platform t
Slide 23: Attractive synergy potential
Attractive synergy potential Approximately €8M of pre-tax cost synergies, i.e., 3% of Kanbay’s 2006E cost base Identified sources of synergies include: end of NASDAQ listing, back-office, headquarters and recruitment Implementation costs of €8M to be equally phased in over 2007-2008 Approx. 43% of K
Slide 24: Consolidated view
Consolidated view Combined Operating Margin Revenues €3784M €144M €3928M €181M €16M €197M 4.8% 11.1% 5.0% H1 Revenues & Margin Headcount 72,000 28% 15% 12% 12% 21% 11% France India UK ROW NA Benelux Q3 06 Revenues by sector* 13% 14% 29% 9% 7% 27% Energy & Utilities Financial Services Other Governmen
Slide 25: Financially compelling transaction
Financially compelling transaction Capgemini to benefit from Kanbay’s faster growth Additional growth derived from revenue synergies Accelerate top line growth Capgemini to benefit from Kanbay’s higher operating margin Benefit from cost and revenue synergies Higher offshore leverage model Positive i
Slide 26: Proposed timeline for the transaction
Proposed timeline for the transaction Shareholders’ meeting early 2007 Announcement on 26 October 2006 HSR filing early November End of HSR waiting period assumed in December 2006 Closing of transaction expected in Q1 2007 October November December 2006 2007
Slide 27: A Deal to accelerate the implementation of Capgemini strategy
A Deal to accelerate the implementation of Capgemini strategy Significant synergy potential Strong strategic fit Financially attractive Straight forward integration Forward-Looking Statements This slide presentation contains forward-looking statements that are subject to risks, uncertainties and oth
Kanbay International — Merger or Acquisition (October 2006) on 6ix