Coforge's board OKs to merge with Cigniti Tech; share swap ratio 5:1

Coforge said that its board approved the scheme of amalgamation of Cigniti Technologies with itself.

Shares of Cigniti Technologies were lower by 6.50% to Rs 1729.40 while Coforge rose 0.91% to Rs 9,536.20 on the BSE.

Cigniti Technologies is a wholly owned subsidiary of the company, engaged in the business of providing digital assurance and engineering (software testing) services across the world helping in predicting and preventing unanticipated failures, leveraging AI-driven, proprietary continuous testing & test automation solutions, which are platform and tool agnostic, thereby optimizing engagement for customer experience. Its turnover was Rs 464.95 crore as on 30 September 2024. Coforge holds 54% stake in the companys expanded share capital.

The amalgamation will create synergized capabilities between the businesses of the companies and create synergized capabilities to offer a strategic advantage in the global arena of AI led assurance and digital engineering IT solutions. The amalgamation will be strategically positioned to expand across diverse industries and regions, with a strong focus on the US market.

With prior acquisitions and the amalgamation, the combined entity will create three new scaled up verticals - Retail, Technology and Healthcare. The amalgamation will help the Coforge realize its objective of scaling up its presence across South-West, Mid-West and Western US markets.

As per share exchange ratio, Coforge will issue one equity share of Rs 10 each fully paid up for every five equity shares held by the existing shareholders of Cigniti Technologies of Rs 10 each fully paid up.

Post scheme of amalgamation, Coforge will dilute 4% stake in Cigniti Technologies.

Coforge is a global digital services and solutions provider that leverages emerging technologies and deep domain expertise to deliver real-world business impact for its clients. The firm has a presence in 21 countries with 26 delivery centers across nine countries.

Cigniti Technologies is engaged in providing software testing services across the world.

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