NEW JERSEY, UNITED STATES – IT services provider Cognizant will acquire digital engineering firm Belcan LLC for approximately $1.3 billion in cash and stock. The acquisition comprises $1.19 billion in cash and 1.47 million Cognizant shares, valued at $97 million based on the company’s closing share price on June 4, 2024.
Cognizant aims to enhance its presence in the $190 billion engineering research and development (ER&D) services sector. This acquisition also marks Cognizant’s entry into the aerospace, defense, space, and marine sectors.
Financial impact and synergies
The acquisition is expected to generate more than $800 million in annualized revenue for Cognizant in 2024. It is also expected to positively impact Cognizant’s earnings per share (EPS) by 2026, generating over $100 million in annual revenue synergies within three years.
“We believe that acquiring Belcan will strengthen Cognizant’s position in the sizable and fast-growing ER&D services market,” said Cognizant CEO Ravi Kumar S.
“We see the opportunity to immediately accelerate revenue growth and create compelling shareholder value through our combined engineering capabilities. 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.”
Lance Kwasniewski will remain as Belcan’s CEO, which will function as a division within Cognizant. “We are excited about this unique combination and the value creation it will bring to our customers, along with the opportunities it will provide for our employees,” said Kwasniewski.
Recent acquisitions
This acquisition follows Cognizant’s recent takeover of Thirdera, a partner of American software firm ServiceNow, in January 2024. Cincinnati-based Belcan is owned by private equity firm AE Industrial Partners LP.
With this strategic move, Cognizant aims to leverage Belcan’s engineering capabilities and domain expertise, complemented by Cognizant’s scale and digital engineering expertise, to provide advanced AI, Cloud, and Data technologies to Belcan’s clients.
