Nasdaq-listed Cognizant Technology Services said on Wednesday it has agreed to acquire Houston-based Utegration, a full-service consulting and solutions provider specialising in SAP technology and certified products for the energy and utilities sectors.
Cognizant will add approximately 350 employees in North America and India upon the close of the acquisition which is expected to close by year-end 2022. Financial details are awaited.
“We believe Utegration’s rich industry expertise and differentiated portfolio of energy and utilities-focused products and accelerators is a perfect complement to our SAP practice,” said Rob Vatter, executive vice president of Cognizant’s Enterprise Platform Services. “In bringing together Utegration’s experienced, specialist team with our global scale in SAP and digital transformation, we have a strong new set of capabilities designed to address the market’s critical transformation needs.”
Utegration serves over 50 North America-based clients in the energy and utilities sector with solutions across four domains aligned to key market needs: customer experience, billing and advanced metering infrastructure; managed services; data science and analytics; and finance & asset performance management.
Under chief executive Brian Humphries, Cognizant has made a string of acquisitions in the past three years. Though it has been aggressive in its mergers and acquisitions (M&A) until last year, this year it has taken a more conservative approach, having made only three acquisitions till date.
Last week, Cognizant acquired digital transformation consulting company AustinCSI in a bid to expand its capabilities to help clients with their digital strategies. On November 1, Cognizant entered into an agreement to acquire Texas-based OneSource Virtual, a professional services and application management firm to complement its existing finance and HR advisory implementation services with Workday.
The relatively fewer number of acquisitions has led to a slowdown in its digital revenue growth compared to the previous year. In Q3, digital revenue grew 7% year-on-year in reported terms or 11% in constant currency, representing approximately 51% of total revenue for the quarter, up 2 points from the prior-year period. “Our slower digital revenue growth reflected the expected lower inorganic contribution we discussed last quarter and the lower billable head count in North America mentioned earlier,” Jan Siegmund, chief financial officer, said during the last quarterly earnings.
Research firm Gartner has forecast global IT spending in the power and utilities market to reach about $175 billion by end of this year, driven by clean energy initiatives, grid modernization, and customer experience management initiatives.