Deal Particulars: Cognizant Technology Solutions Corporation, a leading provider of global information technology and business process outsourcing services, announced that it has signed a definitive agreement to acquire New Jersey-based MarketRx Inc., a leading provider of analytics and related software services to global life sciences companies in the pharmaceutical, biotechnology and medical devices segments. Cognizant will pay approximately $135 million (Rs 540 crore) in cash for the deal, implying an EV/revenue multiple of 3.4.
Cognizant has a strong presence in the healthcare segment and approximately one-third of its revenues come from this vertical. This acquisition will further broaden its service offerings for the life sciences industry, while providing strong synergies with its existing Business Intelligence/Data Warehousing and CRM services.
Impact Analysis: The deal is part of a growing trend of IT companies building capabilities by acquiring relatively smaller companies focussed on niche areas (like market analytics, in this case). As a result of this acquisition, Cognizant will have an access to 75 customers, including top pharma and biotech companies in US. The acquisition will, therefore, provide Cognizant an opportunity to leverage its existing capabilities in the healthcare space to crosssell additional offshore services in applications management and development to these companies. This acquisition will also help Cognizant strengthen its offerings across all areas of the life sciences value chain, from R&D, manufacturing to sales and marketing operations and, at the same time, strengthen its global delivery platform in the analytics space.