On paper, Persistent Systems' proposed €1.1 billion acquisition of Nagarro creates a $3 billion IT services group with a stronger European footprint and broader enterprise software capabilities. But for the management on both sides, the defining factor behind the deal was a shared culture and a belief that the companies had evolved along similar paths.
Rather than pursuing growth for growth's sake, Persistent says it was looking for a partner that could help it compete for larger global transformation deals while preserving its engineering-led DNA. "This is not about growing in revenue. This is more about strategically building a company built to last for the next several years," Persistent Systems' CEO Sandeep Kalra told NDTV Profit.
Kalra said Persistent's rapid growth over the past six years has fundamentally changed the clients and contracts it competes for. As deal sizes have increased, the company needed broader geographic reach, stronger enterprise software capabilities and greater scale in Europe — areas where Nagarro complements its business.
Similarly for Nagarro, the attraction went beyond financial terms. "It just seemed almost too good to be true, the complementarities and the fact that there are two similar companies at heart," said Manas Human, Nagarro's co-founder and CEO.
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Similar Paths
Human said both companies have followed remarkably similar trajectories — starting out as highly respected technical engineering firms before evolving into digital transformation partners for global enterprises. "They've gone through a somewhat similar evolution. Both have been very techie companies, which were well respected," he said.
The executives also sought to address integration, which is one of the biggest concerns for investors. While Kalra acknowledged that combining two global organisations would be the biggest execution challenge, he argued the cultural fit significantly reduces that risk.
"They are willing to work with us and we are willing to work with them," Kalra said, adding that Nagarro's leadership has "no 'not invented here' syndrome," making it more open to adopting best practices from both organisations.
Human echoed that confidence, noting that Nagarro has integrated around 30 acquisitions over the years while preserving what he describes as its entrepreneurial culture. In fact, his formal designation is "Custodian of Entrepreneurship."
Looking beyond the immediate transaction, both leaders framed the acquisition as a bet on the future of enterprise technology rather than traditional IT services. "We want to build one of the world's leading intelligence transformation companies," Human said, arguing that artificial intelligence is reshaping how enterprises invest in technology.
ALSO READ: Persistent Systems To Acquire Nagarro, Eyes $2.9 Billion IT Powerhouse
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