Syntel Sues Cognizant For More Than $6 Billion After TriZetto Acquisition

In a face-off between two big-time solution providers, a unit of Syntel is suing Cognizant for more than $6 billion, following up on the company's acquisition of TriZetto late last year.

Syntel is No. 40 on the CRN 2014 SP500 list, and Cognizant is No. 10.

The lawsuit, filed Monday and first reported by Reuters, alleges that the Cognizant acquisition terminated a contract it had with TriZetto as well as mishandled confidential information. The lawsuit was filed by a division of Syntel, called the Syntel Sterling Best Shores Mauritius Ltd., in the U.S. District Court in New York.

The Syntel unit is asking for $3.4 million in rebates from TriZetto, as well as $6.1 billion in punitive damages from Cognizant. Syntel said that it had asked for what it calls "transition rebates" in the past, but TriZetto has refused to pay the rebates.

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Syntel declined to comment on the news, as it does not comment on pending litigation. CRN reached out to Cognizant, but did not receive a response.

The $2.7 billion TriZetto acquisition from Apax Partners was announced in September and closed in November. TriZetto added health-care-focused IT services, care management and benefit administration capabilities to the portfolio, which could help build Cognizant into a $3 billion "leader in the health-care market," CEO Francisco D'Souza said on an investor call after the news was first announced.

The acquisition boosted Cognizant's health-care capabilities, as the solution provider makes big moves in the vertical, Malcolm Frank, executive vice president of strategy and marketing, told CRN at the time. In particular, Frank told CRN that Cognizant sees big opportunities in health care around mobile, advanced analytics and cloud. The TriZetto acquisition would help give Cognizant the capabilities to act on those opportunities, Frank said.

"We do think it's a game-changer to provide the full capability for the full stack for both payers, providers and, ultimately, the consumers," Frank said at the time.

TriZetto wasn't Cognizant's only acquisition this year. In October, the company picked up marketing agency Cadient to boost its capabilities in the life sciences business and video solutions, as well as Odecee, to add to its digital enterprise solutions in the Australia and New Zealand regions.

PUBLISHED JAN. 13, 2015