Cognizant to buy 6 companies of Germany-based C1 Group; expects revenue to grow by at least 20% to $7.34 billion

MUMBAI: Cognizant Technology Solutions said it was acquiring six IT consulting and services firms of the C1 Group, based in Hamburg, Germany, with a focus on manufacturing and logistics, energy and utlilities, and financial services. The acquisition strengthens Cognizant's presence in Europe, giving it a bigger footprint in Germany and Switzerland. The software firm, which is growing faster than any other in its group, will add 500 people as a result of the transaction. It did not disclose the terms of the deal.

In September, its nearest rival Infosys acquired Zurich-based Lodestone, an enterprise consulting comapny, for $ 350 million. Cognizant expects to grow its revenue by at least 20% to $7.34 billion in 2012. "Wtih this acquisition Cognizant meets two objectives --consulting capability and a local market presence in Germany and Switzerland," said an analyst with an overseas brokerage. In its peer group, Cognizant has the least exposure to Europe with close to 80% of its revenues coming from US.

"The combination of C1’s proven client-facing expertise deeply rooted in the local business environment, and Cognizant’s global delivery capabilities will help clients in Europe to address their dual mandate of driving cost efficiencies and operational effectiveness, as well as innovation and business transformation," the company said in a statement. These companies bring deep expertise in enterprise application services (specifically SAP), and high-end testing services that range from test consulting, strategy and design, to implementation, it added.

“With this acquisition, Cognizant is even better positioned to help European clients achieve agility and competitive advantage by embracing a broad range of services," said Francisco D’Souza, CEO, Cognizant. "International expansion is critical for parts of the group to continue our strong growth, develop better solutions for our current and future customers, and provide greater opportunities for our employees," said Wilfried Förster, founder of the C1 Group.

"The merger of the C1 companies with Cognizant would support Cognizant’s growth strategy for Europe and create a bond with C1’s remaining companies. This move will enable the two companies to drive future diversification, and realize the strong growth potential of our combined strengths," he added. The transaction is expected to close in the first quarter of 2013.