Cognizant Tech weighs RelQ Software acquisition

Cognizant Technology Services, the $370 million, Nasdaq-listed software firm, is weighing acquisition of RelQ Software, the Bangalore-based firm which specialises in software testing.

Sources close to the deal said discussions have started between the two companies and are currently in the early stages. Both companies declined comment, calling it "speculation in the market place".

RelQ is an independent software testing, validation & verification, and quality assurance services company and it closed last fiscal at $14 million with net margins of 8 per cent.

ICICI Venture and Acer Venture are the two significant shareholders in the company besides the promoters. The company currently has a manpower of nearly 500 professionals and has undertaken projects for companies across continents.

RelQ, co-founded by industry veteran Prakash Mutalik along with other experts in this field has been creating a niche for itself in the globally competitive software industry where quality is the key element for success.

Validation and verification is the cornerstone of high quality software and with the increased complexity of software-based applications, they have become complex and specialised.

Independent validation and verification is an emerging trend worldwide and RelQ has been successfully tapping this segment.

Cognizant currently has cash reserves of around $150 million and employes 11,700 professionals globally, of which approximately 70 per cent are in India across its development centres in Chennai, Kolkata, Pune, Bangalore and Hyderabad.