American IT firm Cognizant on Tuesday said it has signed an agreement to acquire digital engineering company Belcan at a purchase value of about $1.3 billion (about ₹10, 861 crore).
The buyout comprises $1.19 billion in cash consideration and a fixed 1.47 million Cognizant shares worth $97 million based on Cognizant’s closing share price on June 7, 2024. Cincinnati-based Belcan is owned by private equity firm AE Industrial Partners.
Through the acquisition, Cognizant seeks to expand its access to the nearly $190 billion ER&D (engineering research and development) services industry and diversify into aerospace, defence, space and marine sectors.
“As a result of this transaction, Cognizant expects to deliver over $100 million in annual revenue synergies within three years, with additional cost synergies expected over time,” a statement said.
The acquisition comes shortly after Cognizant took over American software firm ServiceNow’s partner Thirdera in January 2024.
Belcan’s business is expected to contribute over $800 million of revenue to Cognizant in 2024 on an annualised basis. Belcan CEO Lance Kwasniewski will continue to lead the firm, which will now be an operating unit of Cognizant.
“Belcan’s deep engineering capabilities and domain expertise across the aerospace and defence market will be complemented by Cognizant’s scale and own multi-decade digital engineering expertise, providing Belcan’s blue-chip client roster access to our advanced AI, Cloud and Data technologies,” Cognizant CEO Ravi Kumar S said.
PTI
