IT services provider Cognizant today announced that it has entered into a definitive agreement to acquire six companies of the C1 Group, an independent consulting and IT services firm based in Hamburg, Germany. The terms of the transaction were not disclosed.
Under the terms of the agreement, about 500 professionals across multiple locations in Germany and Switzerland will join Cognizant.
The strategic acquisition will strengthen Cognizant’s local presence in Germany and Switzerland, and enhance global consulting capabilities, and deepen its enterprise solutions expertise. The companies focus on three industry segments: manufacturing and logistics, energy and utilities, and financial services. Known for their client-centric and innovative business culture, 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.
Francisco D’Souza, Chief Executive Officer of Cognizant said, “This strategic acquisition underscores our commitment to the German and the larger European markets, and reinforces our position as one of the top consulting and IT services companies across the region. With this acquisition, Cognizant is even better positioned to help European clients achieve agility and competitive advantage by embracing a broad range of services. The client-first culture of the C1 team, driven by extensive local business insights, strong relationships and entrepreneurial passion, makes it an excellent strategic fit for Cognizant.”
“The agreement announced today is a major step forward for us,” said Wilfried Förster, Founder of the C1 Group, on behalf of the companies acquired by Cognizant. “The outstanding growth and success of the C1 Group within the last ten years have been built on the foundation of customer satisfaction, expert teams with deep industry knowledge, and best-of-breed solutions. 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.
“Cognizant is a company with a similar entrepreneurial culture, widely recognized for customer satisfaction and innovation, and for being a premier employer. 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,” added Wilfried Förster.
Subject to the satisfaction of certain closing conditions and regulatory approvals, the transaction is expected to close in the first quarter of 2013.
"It reflects a very different strategy when compared to Infosys's acquisition of Lodestone. While Lodestone is a focused "Big 5 Style" company that provides SAP implementation and management consulting services for primarily large companies in pharmaceuticals and manufacturing, Cognizant is acquiring 6 largely independently operating companies that provide a broad portfolio of technical, industry-domain, and operational consulting capabilities across a wide set of customers and sectors."
While this acquisition is complex, Cognizant's strong German delivery centre in India (formerly T-Systems, Pune) provides an inherent advantage and should help mitigate some of the risks and facilitate the adoption of the global delivery model services by the acquired companies.
Also the acquisition will help Cognizant penetrate, more successfully, the large number of German medium-sized businesses, the so-called Mittelstand.
