8-KOther Events

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Corporate Update (Oct 15, 2009)

Filed October 15, 2009For Securities:CTSH

Summary

Cognizant Technology Solutions Corporation (CTSH) announced on October 15, 2009, through a Form 8-K filing, the acquisition of UBS Service Centre (India) Private Limited (UBS ISC) for approximately $75 million. This strategic acquisition is to be funded by Cognizant's existing cash reserves, highlighting a disciplined use of capital. The acquisition is coupled with a significant five-year services agreement with UBS AG, under which Cognizant expects to generate approximately $442 million in revenue. This agreement will see Cognizant providing a broad spectrum of services including BPO, KPO, IT services, and remote infrastructure management to various UBS entities. The acquired UBS ISC brings approximately 2,000 employees with expertise in wealth management, investment banking, and IT infrastructure, which Cognizant intends to leverage for strengthening its financial services domain knowledge and integrated service offerings.

Key Highlights

  • 1Cognizant to acquire UBS Service Centre (India) Private Limited (UBS ISC) for approximately $75 million.
  • 2The acquisition will be funded by Cognizant's existing cash reserves.
  • 3A five-year services agreement with UBS AG is expected to generate approximately $442 million in revenue for Cognizant.
  • 4The acquired entity employs approximately 2,000 associates with expertise in wealth management and investment banking.
  • 5This move is expected to enhance Cognizant's capabilities in financial services, BPO, KPO, and IT outsourcing.
  • 6The transaction is anticipated to close in December 2009, subject to closing conditions.

Frequently Asked Questions

The acquisition of UBS ISC is aimed at strengthening Cognizant's capabilities in the financial services sector, particularly in areas like wealth management and investment banking. It also enhances their business process outsourcing (BPO) and knowledge process outsourcing (KPO) offerings, leveraging the acquired talent and domain expertise.

Cognizant plans to fund the $75 million purchase price for UBS ISC using its existing cash reserves, indicating a strong balance sheet and a conservative approach to financing.

Cognizant expects to recognize aggregate revenue of approximately $442 million over the five-year term of the services agreement with UBS AG. This provides a significant revenue stream and a strong customer relationship.

The transaction is expected to close in December 2009, provided that all necessary closing conditions are met.