Cognizant To Acquire Belcan For $1.3 Billion To Bolster Digital Engineering Capabilities
Combining with Belcan will enable Cognizant to strengthen its position in the aerospace and defence industry.
IT services company Cognizant has signed an agreement to acquire Belcan LLC.—a supplier of engineering research and development services—at a purchase price of approximately $1.3 billion in cash and stock, subject to customary adjustments. Cognizant aims to expand its ER&D capabilities through the acquisition, building upon its Internet of Things and digital engineering practice areas.
Belcan provides digital engineering services across the commercial aerospace, defence, space, marine and industrial verticals. Combining with Belcan will enable Cognizant to strengthen its position in the aerospace and defence industry with a blue-chip client base, domain expertise and technological capabilities with over 6,500 engineers and technical consultants, the company said in a press release.
"We believe that acquiring Belcan will strengthen Cognizant's position in the sizable and fast-growing ER&D services market," said Cognizant Chief Executive Officer Ravi Kumar S. "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."
Through the acquisition, Cognizant expects to expand its access to the roughly $190-billion ER&D services market, which is expected to grow at an over 10% forward CAGR through 2026.
Cognizant said it also expects to create shareholder value through enhanced growth opportunities and expected EPS accretion in 2026, and deliver over $100 million in annual revenue synergies within three years, with additional cost synergies expected over time.
The transaction is anticipated to close in the quarter ending Sept. 30, 2024, subject to the receipt of required regulatory approvals and other closing conditions.
