Cognizant, a prominent technology company, has announced its acquisition of Belcan, LLC for approximately $1.3 billion in a deal structured with cash and stock components. Belcan, a leading provider of Engineering Research & Development (ER&D) services, is currently under the portfolio of AE Industrial Partners.
The acquisition is strategically aimed at strengthening Cognizant’s capabilities in the ER&D market, particularly in sectors such as commercial aerospace, defense, space, marine, and industrial segments across North America and the United Kingdom.
Belcan’s established reputation and client base will bring over 6,500 engineers and technical consultants to Cognizant, significantly enhancing its technological expertise and market presence.
In terms of financial impact, Belcan is expected to contribute more than $800 million in revenue to Cognizant annually starting from 2024. The acquisition is anticipated to generate over $100 million in annual revenue synergies within three years, along with additional cost synergies over time.
Ravi Kumar S., CEO of Cognizant, highlighted the strategic importance of the acquisition, emphasizing that it will strengthen Cognizant’s position in ER&D services by integrating Belcan’s deep engineering capabilities and domain expertise. The merger is expected to enable Cognizant to offer enhanced technological solutions, including AI, Cloud, and Data technologies, to both Belcan’s and Cognizant’s clients.
Lance Kwasniewski, CEO of Belcan, expressed optimism about the merger, foreseeing significant value creation for customers and opportunities for employees. He noted that the combination with Cognizant will position Belcan to capitalize on increasing outsourced ER&D spending and robust demand in the aerospace sector.
The acquisition is slated to close by the end of September 2024, subject to regulatory approvals and customary closing conditions. The transaction will be financed through a combination of cash reserves and debt, with advisory roles handled by Perella Weinberg Partners and Arnold & Porter for Cognizant, and Jefferies, Solomon Partners, and Kirkland & Ellis for Belcan.