Cognizant To Acquire Belcan For Rs 10,861 Crore
Through this acquisition, Cognizant aims to enhance its reach within the engineering research and development services sector.
Cognizant Technology Solutions Corp. has announced its agreement to acquire digital engineering firm, Belcan LLC, for approximately $1.3 billion (around Rs 10,861 crore) on Tuesday. The acquisition consists of $1.19 billion in cash and 1.47 million Cognizant shares valued at $97 million, based on Cognizant's closing share price on June 7, 2024.
Cognizant, headquartered in New Jersey and listed on Nasdaq, is a prominent information technology and outsourcing company with a significant presence in India.
Through this acquisition, Cognizant aims to enhance its reach within the approximately $190 billion engineering research and development services sector. Additionally, it seeks to diversify its portfolio by entering the aerospace, defence, space, and marine sectors.
Under the agreement, Belcan's business is anticipated to generate more than $800 million in revenue for Cognizant in 2024 on an annualised basis. Belcan's current Chief Executive Officer, Lance Kwasniewski, will remain in charge of the company, which will operate as a division within Cognizant.
"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 company statement said.
The acquisition comes shortly after Cognizant took over American software firm ServiceNow's partner, Thirdera, in January 2024. Cincinnati-based Belcan is owned by private equity firm AE Industrial Partners LP.
"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," said Cognizant CEO Ravi Kumar S.
Belcan is a global supplier of digital engineering services, serving a diverse customer base across aerospace, defence, space, marine, and industrial sectors, primarily in North America and the UK.
"Belcan’s clients would gain access to Cognizant’s full suite of technology services, while Cognizant’s clients across the manufacturing, automotive, energy, and high-tech sectors, we believe, will benefit from Belcan’s engineering skills," Kumar said.
(With inputs from PTI.)
