Software-services firm Cognizant, which has most of its employees based in India, on Wednesday said that it has acquired French financial services company Equinox Consulting for an undisclosed amount. From this acquisition, the Nasdaq-listed IT major expects about $40 million in annualised revenue.
Paris-based Equinox Consulting, which was founded in 2004, provides business consulting services across investment banking, asset management, retail banking, insurance and specialised financial services. With this acquisition, Cognizant plans to strengthen its global consulting services and local footprint in Europe. According to the deal, about 160 consulting professionals from Equinox Consulting will join Cognizant. Overall in Europe, Cognizant has over 5,300 employees, including about 3,000 professionals across the UK and Ireland.
Cognizant chief executive officer Francisco D’Souza said, “This acquisition underscores our commitment to the French and European markets, and reinforces our position as one of the top consulting companies across the region. With this acquisition, Cognizant is even better positioned to help European clients.”
Experts point out that Europe’s receptiveness towards IT outsourcing and offshoring has lagged far behind that of North America, though the expectation is that current economic downturn would provide the momentum to by opening up newer opportunities for the Indian IT-services companies.
For the New Jersey-based IT major Europe has been the soft spot while the company generates close to 80% of its revenue from the North American market.
However, in the last few years, Cognizant has been aggressively ramping up its presence in the continent. In December last year, Cognizant acquired six companies of German IT consulting and services firm C1 Group for an undisclosed amount. The acquisition was aimed at strengthen the company’s local footprint in Germany and Switzerland and pump up its consulting and enterprise services.
“Our three-year CAGR in Europe is approximately 25%, with both the UK and Continental Europe growing above 20%,” said Santosh Thomas, senior VP and head of Continental Europe and Asia-Pacific, Cognizant, adding that for the IT firm, Equinox is not the first acquisition in France. “In 2010, we had acquired, Galileo Performance, a Paris-based provider of IT testing consulting services.”
During the June quarter, Europe recorded the highest growth for Cognizant at 11% sequentially and 37% year-over-year compared to its Indian peers, while North America grew 6% sequentially and 17% year-over-year.
According to analysts Indian software-services companies are actively pursuing a strategy of adding local flavour to their European operations. Given the diversity in the region, Indian IT firms are taking the inorganic route to get significant business opportunities from the continent. This year TCS acquired French company Alti for R530 crore. The acquisition gave TCS 1,200 employees with a presence in France, Belgium, Switzerland and Algeria. Earlier other IT majors including Infosys, Wipro and HCL Technologies have also taken this route.