“Atos Origin to acquire KPN Datacenter: Atos Origin and KPN examine strategic partnership”


Atos Origin, a leading European information technology services provider, today announced that it has signed a long term services agreement under which it will take over the internal data centre activities of KPN. The agreement establishes Atos Origin as the undisputed market leader in high value-added data centre services in the Netherlands, and one of the major providers of such services in Europe. Both Atos Origin and KPN view this agreement as part of a long-term strategic partnership and have today also signed an outline letter of intent for the provision of substantial additional services.


Under the outsourcing agreement, Atos Origin will take over the shares of KPN Datacenter, which operates the internal data centre of KPN, and is based at 11 locations in 7 cities throughout the Netherlands. The 1,040 staff associated with these operations will become employees of Atos Origin.

Atos Origin already operates a number of data centres throughout Europe, which form part of its Managed Services Division. Following this announcement, KPN's data centre operation in Groningen will become the headquarters of Atos Origin's new 'Global Telco Competence Centre', from it will develop additional KPN and third party business.

Cees de Jong, the current Managing Director of KPN Datacenter, will become Vice President of the Global Telco Competence Centre, reporting to Francis Delacourt, head of Atos Origin's Managed Services business.

Strategic Partnership

Atos Origin and KPN IP/Data Benelux will discuss a strategic partnership within the following months, with the aim to strengthen their combined position in the ICT business market. Both companies examine the possibilities for co-operation in the fields of application management services and advanced hosting solutions.

Atos Origin has today also signed a letter of intent leading to a period of exclusive negotiation with KPN on the outsourcing of two other operations closely linked to KPN Datacenter. These include Software House, a systems integration business which develops most of the internal used software for KPN Datacenter and End User Services, which manages around 35,000 workstations within KPN. Atos Origin also grants the support for the internal IT services to KPN in accordance with market prices.

Transaction Details

Under the terms of the data centre outsourcing agreement, Atos Origin will pay approximately EUR 163 million in cash to acquire the shares of KPN Datacenter. The purchase price will be funded through a combination of long-term debt, convertible bonds and the sale and leaseback of certain data centre properties. The revenues associated with this business will be at least EUR 200 million per annum from 2002 onwards, increasing the size of Atos Origin's Managed Services business by approximately 20%.

The transaction remains subject to consultation with the worker's councils and approval by the Netherlands Competition Authority (Nma) and is expected to be completed by no later than 30th September 2001.

Bernard Bourigeaud, Chairman and Chief Executive of Atos Origin, commented:

"I am delighted that we have won this major contract, in the face of strong international competition. It is the largest single order that we have won since the merger of Atos and Origin in October last year and it represents a major step forward in the development of our Managed Services business. It strengthens our recurring revenues and order backlog very significantly.

This demonstrates once again our leadership in managed services in the Netherlands. The agreement provides the foundation for a long-term partnership between Atos Origin and KPN. We are committed to providing KPN with the very highest quality service, working together to streamline its business processes and thereby helping to reduce its operating costs. Jointly, we will be able to offer a much wider range of new services to the Telco market.

I am convinced that the relationship will be a great success and I would like to take this opportunity to welcome the 1,040 employees of KPN who will be joining our organisation"

KPN CEO Paul Smits emphasised that:

"We chose Atos Origin to manage our internal Datacenter business because it is committed to establishing a long-term, strategic partnership in the field of information technology. Guarantees for the continuity and further development of the business and cultural similarities between the two companies were also important factors in the decision. We expect this partnership to assist KPN in streamlining its internal processes and achieving substantial cost savings.

This agreement represents at the same time another significant step in the implementation of our programme to dispose of non-core activities. With the outsourcing of KPN Datacenter (EUR 163 million) it adds up to approximately EUR 2.2 billion."

About Atos Origin
A tos Origin, a leading European information technology services provider, helps clients turn their vision into results through the effective use of e-business solutions and IT. With sales of more than EUR 2.8 billion in 2000, Atos Origin currently operates in more than 30 countries worldwide and has 27,000 employees. Its clients include ABN-Amro, Akzo-Nobel, Saudi Aramco, BNP Paribas, Cegetel/Vivendi, Credit Lyonnais, Euronext, Fiat, ICI, KPN, Lucent Technologies, Philip Morris, Philips, Shell, Unilever and Wolters Kluwer.

About KPN IP/Data services
KPN is an international telecommunications company based in the Netherlands. Its four core businesses are mobile communications, IP/Data services, Internet and media services and fixed network services. In 2000 KPN reported revenues of EUR 11.2 billion with an EBITDA of EUR 3,403 million (based on normalised figures).

KPN is the leading provider of IP/Data connectivity services in the Benelux. The extensive portfolio exists of datacommunication services, private networks, integration services and enterprise solutions for application management and housing/hosting from its own CyberCenters. It operates 149 high quality/high bandwidth Cityrings in 43 metropolitan areas and three fully equipped CyberCenters in Schiphol, Amsterdam and Brussels with a total of 15,000 m2. The Cityrings are connected through the scalable fiber Lambda network, which covers the Netherlands and is connected to our IP/Data network in Belgium. For more information, visit KPN's web site at http://www.kpn.com.

KPN Press Contacts:
Investor Relations
Taco Titulaer: +31 70 446 0997
Bram Oudshoorn: +31 70 446 1063

Atos Origin Press Contacts:
Marie-Tatiana Collombert
+ 33 (1) 49 00 96 33

Anne de Beaumont
Tel: + 33 (0)1 49 00 96 42
Email: anne.debeaumont@atosorigin.com

Investors Contact:
John White
+ 33 (1) 49 00 96 64