![Cognizant to Acquire Belcan for $1.3 Billion in Cash and Stock Cognizant to Acquire Belcan for $1.3 Billion in Cash and Stock](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfcnE6YyBIy1UIBWFfbIOA5t8QgK0buHbMuA2mVotLVdEcIkOFr2IbC1wD7BIXbMeHlk04xaMCZ41Hbg5m_hSirAeZgnhh_X2kMIs5HqufZRyGUSPGR0x-sy4eJIL0G37_1kJpW0ORTHOW4QPCGSgR8sSvFOEMbDN2P5OLdeL7BIw5cN19S4O2V8ALCsA/s16000-rw/Cognizant_Mangalore_Feb7_2020_2_1581097237290_copy_1000x561.webp)
Belcan is a global supplier of Engineering Research & Development (ER&D) services and has been a portfolio company of AE Industrial Partners. With this acquisition, Cognizant will expand its ER&D capabilities, building upon its leadership in the Internet of Things (IoT) and Digital Engineering practice areas. The deal is expected to provide Cognizant with access to the rapidly growing, specialized ER&D services market, which is estimated to be worth around $190 billion.
The acquisition is anticipated to deliver over $100 million in annual revenue synergies within three years and to be accretive to Cognizant's EPS by 2026. Belcan's expertise across commercial aerospace, defense, space, marine, and industrial verticals, primarily in North America and the UK, will complement Cognizant's existing services.
Cognizant's CEO, Ravi Kumar S., expressed that the acquisition will not only strengthen the company's position in the ER&D services market but also provide Belcan's blue-chip client roster access to Cognizant's advanced AI, Cloud, and Data technologies.
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 Mr. Kwasniewski. "Belcan's experienced team has built a growth-oriented business delivering highly complex, mission-critical, scalable services to our long-standing customer base. I look forward to continuing to lead our team as we unite and leverage Belcan's and Cognizant's comprehensive services and cross-industry clientele to execute on our collective. "
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