Persistent Systems to Acquire Nagarro for €1.27 Billion, Creating AI-Led Digital Engineering Powerhouse
Persistent Systems will acquire Nagarro for €1.27 billion in cash, creating a $2.9 billion AI-led digital engineering firm. The combined entity will have over 46,000 employees across 40+ countries. This strategic move aims to enhance global presence, diversify verticals, and strengthen AI capabilities. The transaction is expected to close by Q1 2027.
The acquisition of Nagarro represents a major strategic move that will significantly alter Persistent Systems' scale, geographical presence, and service offerings, leading to a high impact on its market position and future growth.
The acquisition of Nagarro for a significant sum and the concurrent announcement of a large strategic deal are positive developments, indicating strong growth prospects and strategic expansion for Persistent Systems.
Persistent Systems Limited announced its intention to acquire 100% of Nagarro shares for an enterprise value of €1.27 billion. This strategic combination aims to create an AI-led digital engineering powerhouse, significantly expanding Persistent's global footprint and capabilities.
The acquisition, priced at €81 per share in cash, represents a 140% premium to Nagarro's undisturbed closing price on June 25-26. The transaction values Nagarro at 1.27 times enterprise value to revenue and 9.12 times enterprise value to EBITDA. Persistent has already secured a 21% stake in Nagarro and has extended a voluntary public takeover offer to all outstanding shares, with a minimum acceptance threshold of 50% plus 1 share.
This merger is expected to create a combined entity of over 46,000 team members across 40+ countries, with revenues exceeding $2.9 billion. The combined company will have a more balanced geographical revenue mix, with North America accounting for 62% and Europe 22%. Nagarro brings significant strength in industrial and consumer verticals, as well as a presence in the Middle East, complementing Persistent's existing focus on TMT, BFSI, and HLS.
The financing for the acquisition will be fully funded through a committed bridge financing of €1.4 billion from Barclays. The transaction is expected to be cash EPS accretive in Year 1, excluding transaction expenses. Persistent Systems anticipates the transaction will close towards Q4 of Calendar Year 2026 or early Q1 of Calendar Year 2027, pending regulatory approvals and shareholder consent at the Persistent Annual General Meeting in late July.
In parallel, Persistent Systems also announced a strategic, long-term agreement with an existing global technology leader, adding approximately $125 million annually and over $650 million over 6.5 years. This deal is seen as a testament to Persistent's engineering prowess and is expected to sustain its growth momentum.
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Persistent Systems Limited filed this with the NSE as a statutory disclosure, categorised under acquisition. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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