In another acquisition designed to improve its digital transformation capabilities, Cognizant Technology Solutions entered into an agreement to buy digital engineering and consulting company Softvision. The deal cost $550 million and is expected to close in Q4 of 2018, sources told Reuters.
Softvision works with clients across multiple industries, including healthcare, financial services and retail, to develop customized software platforms using collaborative engineering methods. The deal is expected to bolster Cognizant’s hold in emerging technologies, including virtual reality, the Internet of Things, human sciences and artificial intelligence.
“Extending Softvision's approach to digital engineering, integrated cross-functional teams, agile culture, and talent development across our own teams is a key element of our strategy,” said Cognizant Digital Business President Gajen Kandiah. “This synergy, together with Cognizant's deep technology and industry expertise, will enable us to deliver custom cloud-based software and platforms better and faster, helping more clients transform their businesses to become digital leaders."
Cognizant provides an array of IT and operations services and has a market capitalization of over $40 billion. The firm announced in early August that its digital business now accounts for 30% of its revenue, and this deal indicates the company wants to push that number even higher.
To do that, Softvision could expand Cognizant’s offerings in digital and cloud services in a bid to win market share from rivals IBM and Accenture. Softvision can also enhance Cognizant’s solution delivery procedure and help the firm win new customers.
This deal marks the latest step in Cognizant’s ongoing acquisition frenzy. The company bought Advanced Technology Group in September to expand its cloud-based Quote-to-Cash capabilities, and in late August Cognizant acquired digital transformation consulting firm SaaSfocus. These accretive acquisitions are bringing Cognizant new customers and expanding its digital delivery capabilities, and there’s no reason to think we’ve seen the end yet.