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Cognizant Technologies buys Belcan for $1.3 billion, sees gains from synergy

Information technology services provider Cognizant Technologies said on Monday that it had agreed to acquire digital engineering company Belcan for nearly $1.3 billion in cash and stock.
The deal would expand Teaneck, New Jersey-based Cognizant’s footprint in the aerospace, defence, space and automotive sectors. Cincinnati-based Belcan, which has been owned by private equity firm AE Industrial Partners since 2015, employs 10,000 people across 60 locations globally. Some of its clients include Boeing, General Motors, Rolls-Royce, US space agency NASA and the US Navy.
“I’m excited about the fact that Belcan operates in a sector (aerospace and defence) 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,” Cognizant CEO Ravi Kumar said in an interview with the Reuters.
“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,” Mr Kumar added. That’s the synergy we see.”
Cognizant said that as a part of the deal, Belcan would continue to be led by its CEO Lance Kwasniewski and operate as a unit of Cognizant.
Cognizant, which has market value of $33 billion, is looking to strengthen its offerings in specialised areas as it braces for a slowdown in spending from clients. It has cut its annual revenue forecast in the range of $18.9 billion to $19.7 billion, below prior expectations of $19.0 billion to $19.8 billion.

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