(Reuters) - Information technology services provider Cognizant Technologies said on Monday it has agreed to acquire digital engineering firm Belcan for nearly $1.3 billion in cash and stock.
The deal would expand Teaneck, New Jersey-based Cognizant's footprint in the aerospace, defense, 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.
"I'm excited about the fact that Belcan operates in a sector (aerospace and defense) that is growing faster than the sector we are operating in, which is IT services. So, it allows us to evolve on that growth," Cognizant CEO Ravi Kumar said in an interview with Reuters.
"The capabilities that Belcan has - which is engineering, and which is in aerospace - can 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," Kumar added. " ... That's the synergy we see."
Cognizant said that as 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 a market value of $33 billion, is looking to strengthen its offerings in specialized 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.