Coforge Share Price: Shares of Coforge, which was earlier known as NIIT Technologies, fell nearly 10% on Friday to the day s low of Rs 4,505 on BSE after the IT company reported weak Q4 results in which both revenue and margin missed estimates.
The IT player also stated that it had signed a definitive agreement to take over Cigniti Technologies, an AI & IP-led digital assurance and engineering services company.
Coforge also announced acquisition of Cigniti Tech (CIGN IN; NR), an assurance (testing) company. Management believes Cigniti complements Coforges verticals, geo footprint and client relationships. Coforge has done comprehensive audit (financial and forensic) of the target and finds comfort in scaled relationships and in-place contracts (MSAs over SOWs). We estimate that at current price, the acquisition will be EPS accretive.
Sudhir Singh of Coforge outlines the strategic benefits of acquiring Cigniti, focusing on revenue growth, market expansion, and confidence in successful integration based on past acquisition achievements and team capabilities. Singh says: "Our intent is to raise roughly about $250 million and we will acquire between 51% and 54% of the promoter stake through a QIP."