Cognizant to acquire Belcan for $1.3 Billion

11 Jun 2024 , 11:19 AM

Cognizant Technologies announced on Monday its agreement to acquire digital engineering firm Belcan for nearly $1.3 billion in a cash and stock deal.

The acquisition aims to broaden the footprint of Teaneck, New Jersey-based Cognizant in sectors such as aerospace, defense, space, and automotive.

At the time of wriitng, shares if Cognizant were trading at $67 which is a 1.99% gain than the previous close. The stock has gained a total of 6.21% in the last one year, and 9% dip since the beginning of the year.

Belcan, headquartered in Cincinnati and owned by private equity firm AE Industrial Partners since 2015, employs 60,000 individuals across 60 global locations. Clients include Boeing, General Motors, Rolls-Royce, NASA, and the US Navy.

Cognizant CEO Ravi Kumar highlighted the strategic significance of Belcan’s presence in the rapidly growing aerospace and defense sector, providing an opportunity for Cognizant’s evolution amidst its focus on IT services.

Kumar emphasized the synergies between Belcan’s engineering expertise in aerospace and Cognizant’s strengths in industrial manufacturing and automotive sectors, enabling cross-pollination of services and leveraging distribution networks.

Under the agreement, Belcan will continue to operate under the leadership of its CEO Lance Kwasniewski as a unit of Cognizant.

With a market value of $33 billion, Cognizant aims to enhance its specialized offerings amidst expectations of a client spending slowdown, as reflected in its revised annual revenue forecast of $18.9 billion to $19.7 billion.

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