American IT firm Cognizant on Tuesday said it has signed an agreement to acquire digital engineering company Belcan, LLC at a purchase value of about USD 1.3 billion (about Rs 10, 861 crore).
The buyout comprises USD 1.19 billion in cash consideration and a fixed 1.47 million Cognizant shares worth USD 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.
About the acquisition
Cognizant, through the acquisition, seeks to expand its access to the nearly USD 190 billion ER&D (engineering research and development) services industry and diversify into aerospace, defense, space, and marine sectors.
"As a result of this transaction, Cognizant expects to deliver over USD 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.
Belcan's business is expected to contribute over USD 800 million of revenue to Cognizant in 2024 on an annualised basis.
As per the agreement, Belcan CEO Lance Kwasniewski will continue to lead the firm, which will now work as an operating unit of Cognizant.
"Belcan's deep engineering capabilities and domain expertise across the aerospace & defense 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.
Belcan is a global supplier of digital engineering services, serving a diverse customer base across aerospace, defense, 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.
New Jersey-based Cognizant is a Nasdaq-listed IT and outsourcing firm, with a huge foot base in India.
