Our strategy is to acquire for capability and not for capacity: Cognizant’s Chandrasekaran

| Updated on: Nov 12, 2014
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Cognizant Technology Solutions’ hunger for acquisitions has seen it closing three deals in the last three months, the latest, with Odecee, was announced on Wednesday. “Our growth has largely been organic, and all the acquisitions we have done to date have been tuck-under [smaller companies] acquisitions,” said R Chandrasekaran, Executive Vice-Chairman, Cognizant India, in a chat with BusinessLine . For example, through the recently concluded Cadient acquisition, Cognizant expects revenue to improve by $4 million in the fourth quarter, he said. Edited excerpts from the interview:

Your competitors have been very silent on acquisitions, but Cognizant seems quite aggressive. What’s the strategy?

Our strategy is to acquire for capability and not for capacity. We continue to focus on organic growth and make strategic tuck-under acquisitions to help do one of four things: expand our geographic footprint, strengthen solutions spectrum, deepen consulting and domain capabilities or drive IP-based, non-linearity.

The recent acquisitions we have made of Itaas (for video-engineering capability), Cadient (digital marketing in the life-sciences space), Equinox (financial services consultancy in France) and Odecee (digital solutions with special focus on enterprise mobility, web and cloud) are good examples of this.

Wasn’t TriZetto a big one?

The definitive agreement we signed to acquire TriZetto, though not a traditional tuck-under acquisition, helps us bring together its products with Cognizant’s consulting, IT and business process services. It brings new markets, new technologies and new delivery models to our portfolio. It moves us very significantly in the direction of adding non-linear, IP-based revenue.

With these acquisitions, have you filled the gaps in your geographic expansion and quest for new verticals, or are there still some left?

Our acquisitions have indeed helped us expand our geographic footprint, such as the acquisitions of Equinox in France and the six companies of the C1 Group in Germany. They have complemented and enhanced our solutions spectrum, such as the acquisition of Cadient Group in digital marketing space or MediCall in the medical management area. And they have strengthened our domain, consulting or analytics capability, like PIPC in program management.

In September, we announced a definitive agreement to acquire TriZetto Corporation for $2.7 billion in cash, subject to customary adjustments.

TriZetto is a leading provider of healthcare IT software and solutions.

How about Odecee?

Odecee’s acquisition expands Cognizant’s digital business transformation expertise, portfolio of tools and services, and digital consulting and delivery capabilities to help clients across industries create digital enterprises.

It has strategic business relationships and intellectual property such as Velocedee, a platform that enables rapid implementation of core business processes across a wide range of mobile devices.

Published on November 12, 2014

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