IT services giant Cognizant Technologies revealed on Monday that it has signed an agreement to acquire digital engineering startup Belcan for approximately $1.3 billion in cash and equity.
Cognizant Technologies, a provider of IT services, announced on Monday that it has reached a deal to buy Belcan, a digital engineering company, for around $1.3 billion in cash and stock. The agreement would increase Cognizant’s presence in the aerospace, defense, space, and automotive industries.
Cognizant is situated in Teaneck, New Jersey. 10,000 people are employed by Cincinnati-based Belcan, which has been owned by private equity group AE Industrial Partners since 2015. The company has 60 facilities worldwide. Among its customers are the U.S. Navy, NASA, General Motors, Rolls-Royce, Boeing, and the space agency.
The fact that Belcan is involved in the aerospace and military industry, which is expanding more quickly than the IT services industry, excites me. Thus, it presents a chance for us to build on that expansion,” Cognizant CEO Ravi Kumar stated. “The technical and aerospace skills that Belcan possesses can truly be integrated into Cognizant’s core competencies, which include industrial manufacturing and automotive. Thus, there is a cross-pollination of services and mutual reliance on distribution networks, Kumar continued. That’s the synergy we see.”
According to Cognizant, Belcan will function as a division of Cognizant and continue to be run by CEO Lance Kwasniewski as per the terms of the agreement. With a $33 billion market valuation, Cognizant is preparing for a decline in customer expenditure by expanding its specialist product offerings. Its previous projection of $19.0 billion to $19.8 billion has been lowered to a range of $18.9 billion to $19.7 billion in annual revenue.
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