Coforge To Acquire Controlling Stake In Cigniti Technologies

Indian IT services company will acquire up to a 54% stake in Cigniti for 1,415 rupees per share
Coforge To Acquire Controlling Stake In Cigniti Technologies

Indian IT services company Coforge Ltd. agreed to acquire up to a 54% stake in listed peer Cigniti Technologies Ltd. from its promoters and select public shareholders.

Coforge signed agreements to acquire 1.38 crore Cigniti shares, or a 50.7% stake in the company, for a total of 1,957 crore rupees ($234.45 million), according to the global digital services and solutions provider’s stock exchange announcement.

Coforge, which will acquire Cigniti shares at 1,415 rupees apiece, said the acquisition will trigger a mandatory open offer and the company would buy a maximum of 54% stake in Cigniti, including via the open offer route.

Cigniti closed at 1,373.05 rupees on the National Stock Exchange, while Coforge ended at 4,985.70 rupees in Mumbai trading today.

Both the companies operate in the similar fields of information technology, but there is limited overlap between Coforge and Cigniti with complementary industry verticals and geographical spread of operations, according to the statement.


Coforge said the stake acquisition in Cigniti will not only help the company grow into a $2 billion firm by FY27, but also the ensuing synergies will ensure that Coforge’s operating margins improve by 150-250 basis points during the same period.

Three key reasons the acquisition will be a game changer for Coforge are:

Addition Of New Scaled-Up Industry Verticals

  • The acquisition of Cigniti enables Coforge to scale up and create three new verticals in Retail, Hi-Tech and Healthcare.

  • The merged firm’s Retail vertical will be operating at close to $100 million per annum in size while the Hi-Tech and Healthcare verticals will be operating at around $50 million per annum size immediately post-merger.

Boost To Presence Across In US

  • Coforge currently derives only 48% of its global revenues from its North American operations as its presence has largely been east coast centric in the US.

  • The acquisition of Cigniti will expand Coforge’s North America revenue by around 33% and help the company establish a significant foothold in the crucial west, south-west and mid-west markets.

  • The company expects addition of 28 new Fortune 500 companies in its customer base across these regions with the Cigniti acquistion.

Artificial Intelligence Opportunities

  • Cigniti brings a strong track record in the emerging AI areas, and its expertise in non-functional testing, encompassing security, performance, and automation, will be crucial in the development and deployment of trustworthy and reliable AI-powered applications.

  • There is a further scope to build a horizontal “AI Assurance” offering, including modules for data interrogation, bias detection, stability/precision drift testing and model optimization, leveraging cross disciplinary teams skilled in quality engineering for AI projects.


The deal is likely to conclude by 2QFY25, subject to completion of the conditions and receipt of regulatory approvals.

The proposed transaction will require approval from the Competition Commission of India and approval under the Hart-Scott-Rodino Antitrust Improvements Act, among others.

Note: $1 = 83.4704 Indian rupees

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