Coforge to acquire up to 54% stake in Cigniti Technologies at ₹1,415 per share

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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IT solutions company Coforge Ltd on Thursday (May 2) said it will acquire up to 54% stake in Cigniti Technologies at ₹1,415 per share.

The proposed acquisition entails Coforge entering into share purchase agreements with Cigniti’s promoters and select public shareholders. The consideration for the acquisition, valued at a price of ₹1,415 per share, will be discharged in cash.

“…it is hereby informed that the company has agreed to enter into a share purchase agreement with the promoters and select public shareholders of Cigniti Technologies Limited to acquire up to 54% approx. of the share capital of Cigniti Technologies Limited (collectively, the “Share Purchase Agreements”) subject to execution of definitive agreements and completion of certain identified conditions precedent,” according to a stock exchange filing.

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This transaction, although not falling under related party transactions, represents a strategic alignment between Coforge and Cigniti, both operating in the IT/ITeS industry. While there is limited overlap between the two entities, the complementary industry verticals and geographical spread of operations are expected to create synergies and enhance revenue distribution post-acquisition.

The completion of the acquisition is anticipated by the second quarter of FY25, contingent on meeting the conditions, regulatory approvals, and closing action items under the share purchase agreements. The acquisition will also trigger a mandatory open offer in accordance with SEBI regulations, enabling Coforge to further consolidate its position in Cigniti.

Cigniti Technologies, a listed entity on both BSE and the National Stock Exchange of India Ltd, specialises in providing quality digital engineering services across various geographies including the USA, UK, Australia, Canada, Czech Republic, South Africa, and Singapore, with its delivery centre based in India.

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With a history dating back to its incorporation on September 3, 1998, Cigniti has steadily grown its turnover over the years, with its FY24 turnover reaching ₹814.47 crore.

Shares of Coforge Ltd ended at ₹4,986.10, down by ₹114, or 2.24%, on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow