Cognizant CEO Says $1.3B Belcan Buy Will Help ‘Blue-Chip Clients’ And Create $800M In Sales

‘Belcan’s deep engineering capabilities and domain expertise across the aerospace and defense market will be complemented by Cognizant’s scale and own multidecade digital engineering expertise, providing Belcan’s blue-chip client roster access to our advanced AI, cloud and data technologies,’ says Cognizant CEO Ravi Kumar.

Solution provider powerhouse Cognizant is acquiring engineering services specialist Belcan for $1.3 billion in a move to boost its engineering and development business, as well as capture blue-chip Belcan customers such as NASA, the U.S. Navy and General Motors.

“Belcan’s deep engineering capabilities and domain expertise across the aerospace and defense market will be complemented by Cognizant’s scale and own multidecade digital engineering expertise, providing Belcan’s blue-chip client roster access to our advanced AI, cloud and data technologies,” said Cognizant CEO Ravi Kumar in a statement.

Cognizant CEO said Belcan will add over $800 million of annualized revenue to the Teaneck, N.J.-based company’s bottom line once the acquisition is complete.

The deal will also boost Cognizant’s customer base in industries such as aerospace, government defense, space and the automotive industry, said Kumar.

“We see the opportunity to immediately accelerate revenue growth and create compelling shareholder value through our combined engineering capabilities,” CEO Kumar said. “Belcan’s clients would gain access to Cognizant’s full suite of technology services, while Cognizant’s clients across the manufacturing, automotive, energy and high-tech sectors we believe will benefit from Belcan’s engineering skills.”

Cognizant’s Acquisition Details For Belcan

Cognizant will pay $1.3 billion in cash and stock for Belcan, a digital engineering services company based in Cincinnati that employs over 60,000 people across the globe in 60 locations.

Belcan has been owned by private equity firm AE Industrial Partners since 2015.

The company has over 6,500 engineers and technical consultants. Over the past two years, Belcan has increased annual sales by approximately 8 percent each year.

Cognizant, ranked No. 8 on CRN’s Solution Provider 500 list in 2024, said it expects to deliver over $100 million in annual revenue synergies within three years.

Cognizant currently has a market cap of $33.3 billion.

The deal is expected to close in the third quarter of 2024, meaning before Sept. 30.

Belcan’s Future

Belcan provides critical digital engineering services for a large customer base across the commercial aerospace, defense, space, marine and industrial verticals—primarily in North America and the United Kingdom.

Belcan will continue to be led by CEO Lance Kwasniewski. The company will operate as a business unit of Cognizant.

Cognizant said it will increase its share repurchase plan to maintain current share count guidance of nearly 500 million for full-year 2024.

“Cognizant will better position our team to capitalize on compelling tailwinds, including increasing outsourced ER&D spend, the transformative impact of digital engineering adoption rates, robust commercial aerospace demand, and favorable long-term defense and space spending,” said Kwasniewski in a statement. “I look forward to continuing to lead our team as we unite and leverage Belcan’s and Cognizant’s comprehensive services and cross-industry clientele to execute on our collective strategy, ultimately earning the role of our clients’ most trusted partner in intelligent engineering.”