Coforge cigniti: Coforge, Cigniti forge ahead with proposed merger

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Coforge and Cigniti Technologies are moving a step ahead toward a planned merger. The two companies have appointed EY and Axis Capital to prepare merger terms, which they intend to propose to their respective shareholders within a fortnight, according to people aware of the matter.As per the merger plan, Coforge will absorb the listed Cigniti Technologies. Coforge’s market capitalisation has doubled to more than Rs 62,000 crore in the past seven months. Cigniti Technologies shareholders will be issued shares of Coforge once the advisers come up with an acceptable swap ratio, according to the people cited. Coforge, formerly known as NIIT Technologies, owns a 54% stake in Cigniti Technologies.

Coforge had announced the acquisition of the majority stake in Cigniti Technologies on May 2. It subsequently launched an offer of its own shares later that month through the qualified institutional placement (QIP) route to raise Rs 2,240 crore to finance the acquisition of Cigniti shares.

According to the QIP documents seen by ET, Coforge’s clients in North America are largely located on the east coast whereas Cigniti has customers in the west and Midwest, making for synergy.

The companies, EY and Axis Capital didn’t respond to queries.


Coforge is among the few sizable listed IT companies without an identifiable promoter entirely owned by public investors.

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It was earlier majority-owned by EQT (formerly Baring Private Equity Asia), which had acquired a stake of nearly 70% in the company over a period of time beginning 2019. It sold the entire stake last year, making significant gains. When it entered, the shares had been at Rs 1,394 apiece. It exited at Rs 4,700 per share, when it sold the remaining 26% stake in August last year. It sold partial stakes in 2020, 2021 and 2022.NIIT was renamed Coforge after the acquisition by EQT Baring Private Asia equity. NIIT’s original promoters were Rajendra Pawar and Vijay Thadani. Under the leadership of its CEO Sudhir Singh, a former top executive at Infosys, the company hit the $1 billion revenue milestone in April 2023. It is now looking at AI to get to $2 billion and eventually $5 billion, Singh told ET recently.

“We think AI represents a massive opportunity for us,” said Singh, who is also executive director. “We need to transform into being an actual AI-first organisation, because the journey from $2 (billion) to $5 (billion) or $2 (billion) to $10 (billion) becomes that much faster then.”

Despite the $250 billion IT industry seeing one of its worst growth periods in the last two years due to geopolitical strife and macroeconomic concerns, firms such as Coforge have managed to report strong growth and profitability.



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Coforge cigniti: Coforge, Cigniti forge ahead with proposed merger


Coforge and Cigniti Technologies are moving a step ahead toward a planned merger. The two companies have appointed EY and Axis Capital to prepare merger terms, which they intend to propose to their respective shareholders within a fortnight, according to people aware of the matter.As per the merger plan, Coforge will absorb the listed Cigniti Technologies. Coforge’s market capitalisation has doubled to more than Rs 62,000 crore in the past seven months. Cigniti Technologies shareholders will be issued shares of Coforge once the advisers come up with an acceptable swap ratio, according to the people cited. Coforge, formerly known as NIIT Technologies, owns a 54% stake in Cigniti Technologies.

Coforge had announced the acquisition of the majority stake in Cigniti Technologies on May 2. It subsequently launched an offer of its own shares later that month through the qualified institutional placement (QIP) route to raise Rs 2,240 crore to finance the acquisition of Cigniti shares.

According to the QIP documents seen by ET, Coforge’s clients in North America are largely located on the east coast whereas Cigniti has customers in the west and Midwest, making for synergy.

The companies, EY and Axis Capital didn’t respond to queries.


Coforge is among the few sizable listed IT companies without an identifiable promoter entirely owned by public investors.

Discover the stories of your interest


It was earlier majority-owned by EQT (formerly Baring Private Equity Asia), which had acquired a stake of nearly 70% in the company over a period of time beginning 2019. It sold the entire stake last year, making significant gains. When it entered, the shares had been at Rs 1,394 apiece. It exited at Rs 4,700 per share, when it sold the remaining 26% stake in August last year. It sold partial stakes in 2020, 2021 and 2022.NIIT was renamed Coforge after the acquisition by EQT Baring Private Asia equity. NIIT’s original promoters were Rajendra Pawar and Vijay Thadani. Under the leadership of its CEO Sudhir Singh, a former top executive at Infosys, the company hit the $1 billion revenue milestone in April 2023. It is now looking at AI to get to $2 billion and eventually $5 billion, Singh told ET recently.

“We think AI represents a massive opportunity for us,” said Singh, who is also executive director. “We need to transform into being an actual AI-first organisation, because the journey from $2 (billion) to $5 (billion) or $2 (billion) to $10 (billion) becomes that much faster then.”

Despite the $250 billion IT industry seeing one of its worst growth periods in the last two years due to geopolitical strife and macroeconomic concerns, firms such as Coforge have managed to report strong growth and profitability.



Source link

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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