Cognizant Technologies to Acquire Digital Engineering Firm Belcan for $1.3 Billion

Information technology services provider Cognizant Technologies (CTSH.O) announced on Monday its planned acquisition of digital engineering firm Belcan for nearly $1.3 billion in cash and stock. This strategic acquisition aims to significantly expand Cognizant’s presence in the aerospace, defense, space, and automotive sectors.

Belcan, headquartered in Cincinnati and owned by private equity firm AE Industrial Partners since 2015, employs 10,000 people across 60 locations worldwide. The firm boasts a large client list, including industry giants such as Boeing, General Motors, Rolls-Royce, NASA and the U.S. Navy.

In an interview with Reuters, Cognizant CEO Ravi Kumar expressed enthusiasm about the acquisition. “I’m excited about the fact that Belcan operates in a sector (aerospace and defense) which is actually growing faster than the sector we are operating in, which is IT services. So, it gives us an opportunity to evolve on that growth,” Kumar said.

Kumar highlighted the complementary nature of Belcan’s capabilities and Cognizant’s strengths. “The capabilities that Belcan has — which is engineering, and which is in aerospace — can actually be cross-pollinated into the Cognizant strength area, which is primarily industrial manufacturing and automotive. So, it’s a cross-pollination of services on both sides and the leverage of distribution networks on both sides,” he added. “That’s the synergy we see.”

As part of the acquisition deal, Belcan will continue to be led by its current CEO, Lance Kwasniewski, and will operate as a unit within Cognizant.

Cognizant, with a market value of $33 billion, is strategically bolstering its offerings in specialized areas in anticipation of a potential slowdown in client spending. The company has recently adjusted its annual revenue forecast to a range of $18.9 billion to $19.7 billion, down from the previous expectation of $19.0 billion to $19.8 billion, according to Reuters.

Source: Reuters