Cognizant makes plans to strike 5–10 deals each year

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Cognizant that has been seeking to pace up its speed of acquirements is aiming between 5 and 10 deals each year, the chief financial officer of the company claimed to the sponsors in New York this week.

The Bengaluru-located Wipro and US-located Cognizant have been amongst the most hard line acquirers in the IT sector of the country. HCL Technologies has also invested more than $700 Million purchasing intellectual property from firms such as IBM. “We have openly claimed that we might like to increase up the quantity of M&A deal, definitely not to the capability of some of our contestants, but surely 5–10 deals per year might be comfy,” Chief Financial Officer at Cognizant, Karen McLoughlin, claimed to the sponsors at a meeting held in New York by Deutsche Bank last week.

Though most of the agreements might be tuck-in, they need not unavoidably be minute. “Most of the contracts might carry on to be smaller tuck-in agreements. But from our point of view a tuck-in deal might be anywhere up to a few thousand million dollars,” she further added. IT firms are contending with competitors such as Accenture, that is investing more than $1 Billion each year on acquirements. Spending spree of Accenture is extremely stunning.

“Accenture did not post any acquirements this week,” industry expert David Koning claimed to the media in his weekly note. McLoughlin did not rule out the firm making bugger acquirements. “We surely might look at bigger deals, but there are not a lot of them.” Rishad Premji of Wipro also claimed to the media last week that the firm might look at bigger acquirements if the demand arose.

IT firms are aimed on buying out firms with niche abilities that might assist them win contracts in newer areas of the digital world. Cognizant, in specific, is coping up with a larger challenge of both winning fresh business in an uneasy market and lifting its margin to fulfill with a tactical plan made after Elliott Management, the activist investor, took aim at the firm for giving out weak sponsor returns, as per the sources.

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