Cognizant, an information technology services and consulting company, announced on Monday, June 10, an agreement to purchase digital engineering firm Belcan for almost $1.3 billion in mixed cash and shares.
Deal Between Cognizant, Belcan Projected to Finalize in Q3
According to a press release, Belcan will remain under the leadership of its CEO, Lance Kwasniewski, and function as a division of Cognizant as part of the deal.
The purchase will be completed in the third quarter, pending regulatory clearances and other conditions. The deal's total purchase price of $1.29 billion, subject to customary adjustments, includes $1.19 billion in cash and 1.47 million Cognizant shares, worth $97 million based on the closing share price on Friday, June 7.
With a market cap of $33 billion, Cognizant is preparing to reduce customer spending and enhance its products in specialized areas. According to Reuters, the company's previous revenue projection was between $19.0 billion and $19.8 billion but has now reduced it from $18.9 billion to $19.7 billion.
Cognizant Anticipates Growth in Various Sectors After Deal With Belcan
The acquisition would increase Cognizant's presence in the aerospace, military, space, and automotive industries. Headquartered in Cincinnati, Ohio, Belcan has a worldwide workforce of 10,000 spread throughout 60 offices.
The US Navy, National Aeronautics and Space Administration (NASA), General Motors, Rolls-Royce, and Boeing are among its customers. In the statement, Cognizant CEO Ravi Kumar expressed excitement about Belcan's position in the aerospace and defense industry, which is expanding at a quicker rate than Cognizant's own business.
He also pointed out that Belcan's engineering skills will benefit Cognizant's manufacturing, automotive, energy, and high-tech divisions.
Join the Conversation