DBT Bureau
Bengaluru, 3 May
Indian mid-tier IT services company, Coforge has launched an open offer to acquire an additional 26% stake in Cigniti Technologies a day after it announced its plan to take over more than 50% holding in the company.
In an exchange filing, company said it plans to acquire up to 71.62 lakh equity shares with an intention to acquire majority control of Cigniti Technologies. Price for the open offer is the same at Rs 1,415 per share, which is at a 7% premium to Cigniti’s closing price on Friday.
On Thursday evening, Coforge announced its plan to acquire a 54% stake in Cigniti Technologies at Rs 1,415 per share. According to Indian market regulations, the move triggered the open offer.
Coforge has to pay Rs 1,013 crore if the open offer is accepted fully by Cigniti’s shareholders. To acquire 50.66% of the stake in the company, Coforge has to fork out around Rs 1,957 crore. So, the IT firm has to spend around Rs 3,000 crore in acquiring a majority stake in Cigniti.
Coforge’s share price fell 10% on Friday to settle at Rs 4,485 per share on the National Stock Exchange as investors reacted to this announcement,
Cigniti Technologies, which is a listed entity on both BSE and the National Stock Exchange of India, provides digital engineering services across the US, UK, Australia, Canada, Czech Republic, South Africa, and Singapore and has a sound presence in India as its delivery centre.
Giving the rationale behind such a big-ticket acquisition, Coforge has said that post this acquisition, its revenue is likely to grow to $2 billion by FY27 along with an improvement of margin by 150-200 basis points by this period.
“The acquisition will create three new scaled-up verticals – Retail, Technology and Healthcare. It will help Coforge realize its objective of scaling up its presence across South-West, Mid-West, and Western US markets. It will also help Coforge address the significant opportunities that the proliferation of AI is creating for specialized Assurance Services,” the company said in an exchange filing on Thursday.
