Persistent buys Nagarro, eyes $2.9 billion in annual sales

Persistent Systems is bulking up with the acquisition of Europe services provider Nagarro in a deal valued at nearly $1.3 billion.

The combined company will have $2.9 billion in annual sales and more than 46,000 employees.

Nagarro, based in Munich, will add about 18,500 employees and $1.14 billion in annual sales. Nagarro also has a strong Europe footprint in digital engineering across industrial, consumer, telecom and financial services. Persistent is strong in North America.

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According to Persistent, its EUR 81 per share offer for Nagarro is a 140% premium to its closing price June 25.

Sandeep Kalra, CEO of Persistent, said in a statement:

"This combination strengthens our position in Europe, expands our scale in North America, and enhances our ability to help clients accelerate their AI and digital transformation journeys. Together, we are creating one of the industry’s leading AI-led, engineering-driven digital transformation companies, creating greater opportunities for our clients, our people, and all our stakeholders."

Key items:

• Persistent said Nagarro will be accretive to earnings in the first year.
• The combined company will have a broader set of AI platforms, partnerships and enterprise expertise across ERP and CX systems.
• Persistent and Nagarro combined has 37,000 employees in India, 3,500 in North America and 3,000 in Europe.
• The combination will bring Persistent's European revenue from 9% of sales annually to 22%. North American revenue will be 62% of sales.