Cognizant acquires engineering staffing firm Belcan for $1.3Bn
NEW JERSEY, UNITED STATES — IT services provider Cognizant entered into a definitive agreement to acquire Belcan, a global supplier of engineering research and development (ER&D) services, for approximately $1.3 billion in cash and stock.
The acquisition will significantly strengthen Cognizant’s engineering capabilities and establish it as a major player in the high-growth aerospace and defense market.
Financial upsides and market growth of Cognizant
The deal is expected to be financially accretive to Cognizant’s earnings per share (EPS) by 2026 and is projected to deliver more than $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.
“Belcan’s deep engineering capabilities and domain expertise across the aerospace & defense market will be complemented by Cognizant’s scale and own multi-decade digital engineering expertise, providing Belcan’s blue-chip client roster access to our advanced AI, Cloud and Data technologies.”
The acquired business is expected to contribute over $800 million in annualized revenue to Cognizant.
Continued leadership and operational focus
Post-acquisition, Belcan will operate under its existing brand within Cognizant’s organizational structure. Lance Kwasniewski will continue as CEO of Belcan, ensuring continuity and stability.
“Cognizant will better position our team to capitalize on compelling tailwinds, including increasing outsourced ER&D spend, the transformative impact of digital engineering adoption rates, robust commercial aerospace demand, and favorable long-term defense and space spending,” said Kwasniewski.
Cognizant has agreed to acquire Belcan, expanding access to the high-growth Engineering Research & Development services market and establishing leadership in aerospace & defense. See the release here: https://t.co/2HS9UKKR5V pic.twitter.com/XoZqEHelEr
— Cognizant (@Cognizant) June 10, 2024
Transaction details
The $1.29 billion purchase price comprises $1.19 billion in cash and 1.47 million Cognizant shares. The deal is expected to close in Q3 2024, subject to regulatory approvals.
Cognizant, a Fortune 500 company recognized among the world’s most respected businesses, combines technologies like IoT, AI, and cloud to help clients stay ahead of workforce and market changes. It ranked #6 in the OA500 2024, an objective index of the world’s top 500 outsourcing companies.
The company’s revenue was $4.8 billion, down 1.1% year-over-year but above the high end of the firm’s guidance range.
Belcan, on the other hand, provides mission-critical digital engineering services to top aerospace, defense, space, and industrial companies, with over 6,500 engineers and technical consultants.