Cognizant’s 3 new acquisitions enhance digital and global reach

Cognizant has made seven acquisitions since the beginning of 2017, adding between 2,200 and 2,300 employees and over $500 million in acquired revenue (by TBR estimates). The company’s acquisition spree continued in recent months with three additional purchases. In August Cognizant bought SaaSfocus, a Salesforce consultancy based in Noida, India, with operations in Delhi and Mumbai, India, as well as Sydney and Melbourne, Australia. SaaSfocus has completed over 1,500 Salesforce engagements in India and Australia with clients across the financial services, insurance, manufacturing and automotive sectors, including Audi, Baxter and Holcim. SaaSfocus has also forged strategic integration, application and industry-specific partnerships with companies including Informatica, Jitterbug, MuleSoft, DocuSign and Cloud Lending Solutions. TBR estimates SaaSfocus will add between $3 million and $4 million in new revenue and over 350 employees (about 280 are providing service delivery from India).

In September Cognizant announced the acquisition of Kansas-based Advanced Technology Group (ATG), further expanding its advisory capabilities on the Salesforce platform, specifically around the management and implementation of quote-to-cash (QTC) solutions: configure, price, quote (CPQ) software; multiplatform contract life cycle management and billing; and automating QTC processes. ATG operates delivery facilities in Kansas, Missouri, Ohio and Montana and has IBM, Subaru and CenturyLink on its client roster. We estimate ATG will add between $2 million and $3 million in revenue and about 280 employees to Cognizant after it is fully integrated.

Finally, in early October Cognizant announced it would acquire Austin, Texas-based Softvision. Financial terms were not disclosed, but Cognizant was expected to pay as much as $550 million to acquire Softvision’s 2,800 digital product and design engineers working in 27 studios across 11 countries (though the majority of digital product development will be in North America). TBR estimates Softvision will add between $160 million and $180 million in inorganic revenue to Cognizant beginning in 4Q18.

Cognizant’s latest purchases deepen its digital engineering capabilities, particularly around Salesforce technologies, but short-term margin erosion can be expected as Cognizant integrates its latest buys. Even as enhanced Salesforce competencies position Cognizant as a leading cloud CRM, marketing and platform vendor, integrating three additional employee bases into a workforce already beset by high turnover may exacerbate Cognizant’s struggle to control attrition. Still, Cognizant’s newest acquisitions will further enable the company to fulfill its overarching strategy of driving digital to the core of client enterprises.

TBR continues to view Cognizant as a leader among the India-centric vendors, and the company certainly separates itself from peers with its aggressive acquisitions. Executing on integration remains the key, and TBR will closely watch (and report on) progress.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.