Startups

Cognizant to acquire acquire digital engineering firm Belcan for $1.3 billion

Cognizant Technologies, a leading information technology services provider, announced on Monday it has reached an agreement to acquire digital engineering firm Belcan for approximately $1.3 billion in a combination of cash and stock.

This strategic acquisition will broaden Cognizant’s reach into 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 global locations. Its high-profile clients include Boeing, General Motors, Rolls-Royce, NASA, and the U.S. Navy.

Post-acquisition, Belcan will continue to operate under the leadership of its current CEO, Lance Kwasniewski, as a unit within Cognizant.

Commenting on the acquisition, Cognizant CEO Ravi Kumar told Reuters in an interview saying, “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 highlighted the complementary nature of the two companies’ capabilities, stating, “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. … That’s the synergy we see.”

Cognizant, with a market value of $33 billion, aims to enhance its specialized offerings in light of anticipated reductions in client spending. The company recently adjusted its annual revenue forecast to a range of $18.9 billion to $19.7 billion, down from its previous projection of $19.0 billion to $19.8 billion.

We covered Cognizant in 2021 after the company paid $95 million in settlement to resolve a lawsuit brought by its investors. The New Jersey-based information technology services company was accused of defrauding shareholders by concealing bribes to officials in India for facility permits.

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