Cognizant Technologies has entered into a definitive agreement to acquire Belcan for approximately $1.3bn.
This acquisition, which includes $1.19bn in cash and a fixed 1.47 million Cognizant shares, is aimed at bolstering Cognizant’s footprint in the engineering research and development (ER&D) services market.
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Belcan, a portfolio company of AE Industrial Partners, specialises in providing critical digital engineering services.
With operations in North America and the UK, Belcan serves a diverse customer base across commercial aerospace, defence, space, marine, and industrial sectors.
Cognizant said this acquisition will enable it to tap into the approximately $190bn ER&D services market, which is projected to grow at a forward compound annual growth rate (CAGR) of more than 10% through 2026.
The integration of Belcan is anticipated to enhance Cognizant’s existing Internet of Things (IoT) and digital engineering practice areas.
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By GlobalDataWith more than 6,500 engineers and technical consultants, domain expertise, and technological capabilities, the combination with Belcan is also expected to add scale and enhance Cognizant’s position in the aerospace and defence space, and marine sectors.
The financial impact of the acquisition on Cognizant’s revenue for 2024 is contingent on the deal’s closing timeline but is expected to exceed $800m on an annualised basis.
Belcan’s revenue has seen an 8% CAGR over the past two years.
Cognizant CEO Ravi Kumar S said: “We believe that acquiring Belcan will strengthen Cognizant’s position in the sizable and fast-growing ER&D services market. 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.”
As an operational unit of Cognizant, Belcan will continue to be led by its CEO, Lance Kwasniewski, and will continue to operate under the Belcan brand.
Kwasniewski added: “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 favourable long-term defence and space spending.”
The deal is expected to close by the end of September 2024, pending regulatory approvals.
This move follows Cognizant’s acquisition of ServiceNow consultancy Thirdera in December 2023.
