COGNIZANT TO ACQUIRE BELCAN FOR APPROXIMATELY $1.3 BILLION TO SIGNIFICANTLY STRENGTHEN ENGINEERING CAPABILITIES AND ESTABLISH A LEADERSHIP POSITION IN AEROSPACE & DEFENSE MARKET
Significantly expands access to the
Engineering Research & Development services market
Immediately accelerates growth opportunity through presence in attractive
aerospace & defense sector with established blue-chip clients
Expected to deliver >
within three years and to be accretive to 2026 EPS
Cognizant to host investor conference call to discuss transaction on
Belcan is an established player in ER&D that provides mission-critical digital engineering services for a long-standing customer base across the commercial aerospace, defense, space, marine and industrial verticals, primarily in
The acquisition will significantly expand Cognizant's ER&D capabilities, building upon the Company's leadership in the Internet of Things (IoT) and Digital Engineering practice areas. Combining with Belcan will also add scale and enable Cognizant to establish a leadership position in the high-growth aerospace & defense (A&D) industry with a blue-chip client base, deep domain expertise, and significant technological capabilities with over 6,500 engineers and technical consultants.
The revenue the acquired business will contribute to Cognizant in 2024 depends on the timing of the close but is expected to be over
"We believe that acquiring Belcan will strengthen Cognizant's position in the sizable and fast-growing ER&D services market," said Cognizant CEO
Kumar continued, "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."
As a result of this transaction, Cognizant expects to:
- Significantly expand its access to the
~$190 billion ER&D services market, which is expected to grow at an over 10% forward CAGR through 2026, complementing its existing IoT and Digital Engineering practice areas - Diversify into the fast-growing A&D, space and marine sectors, with a stable set of blue-chip clients
- Add a highly skilled, technical and accredited workforce and an employer of choice in ER&D services
- Create shareholder value through enhanced growth opportunities and expected EPS accretion in 2026; expected to be broadly neutral to EPS in 2025
- Deliver over
$100 million in annual revenue synergies within three years, with additional cost synergies expected over time - Complement the highly talented and strong US/
UK based workforce of Belcan with the talent pool from Cognizant's global delivery network to support global programs in the Belcan client base
"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. 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
Transaction Details
The transaction is anticipated to close in the quarter ending
Cognizant intends to increase its share repurchase plan to maintain current share count guidance of 497 million for the full year 2024.
Advisors
Perella Weinberg Partners served as financial advisor and Arnold & Porter served as legal advisor to Cognizant.
Conference Call Details
Cognizant will host a conference call on
About Cognizant
Cognizant (Nasdaq: CTSH) engineers modern businesses. We help our clients modernize technology, reimagine processes and transform experiences so they can stay ahead in our fast-changing world. Together, we're improving everyday life. See how at www.cognizant.com or @cognizant.
About Belcan
Founded in 1958, Belcan is a global supplier of design, software, manufacturing, supply chain, information technology, and digital engineering services to the aerospace, defense, space, marine, government services, automotive, and industrial markets. Belcan engineers better outcomes for customers – from jet engines, airframe, and avionics to heavy vehicles, automobiles, and cybersecurity.
Forward Looking Statements
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which is necessarily subject to risks, uncertainties and assumptions as to future events that may not prove to be accurate. These statements include, but are not limited to, express or implied forward-looking statements relating to the anticipated growth of the ER&D services market and A&D sector; the benefits of the proposed transaction between us and
For more information, contact:
Investors |
Media |
|
|
View original content to download multimedia:https://www.prnewswire.com/news-releases/cognizant-to-acquire-belcan-for-approximately-1-3-billion-to-significantly-strengthen-engineering-capabilities-and-establish-a-leadership-position-in-aerospace--defense-market-302167832.html
SOURCE Cognizant