Summary
Cognizant Technology Solutions Corporation (CTSH) announced a significant acquisition through its wholly-owned subsidiary, Cognizant Domestic Holdings Corporation, entering into a Stock Purchase Agreement on September 14, 2014. The company is set to acquire 100% of the outstanding common stock of TZ US Parent, Inc. and 100% of the outstanding units of preferred limited liability company interests of TZ US Midco, L.L.C. This transaction, valued at an enterprise value of $2.7 billion and to be paid entirely in cash, is expected to close in the fourth quarter of 2014, subject to customary closing conditions including antitrust review. This strategic move indicates Cognizant's intention to expand its business through acquisitions. Investors should note that the company has secured a commitment for up to $1.0 billion in senior unsecured bridge loans, although its current plan is to pursue alternative long-term debt financing. The announcement was made through a press release and accompanied by an investor presentation, signaling proactive communication regarding this material development.
Key Highlights
- 1Cognizant is acquiring TZ US Parent, Inc. and TZ US Midco, L.L.C. for an enterprise value of $2.7 billion.
- 2The acquisition will be funded entirely with cash.
- 3The transaction is expected to close in the fourth quarter of 2014.
- 4Regulatory approval, including Hart-Scott-Rodino antitrust review, is a condition for closing.
- 5Cognizant has obtained a $1.0 billion bridge loan commitment, though it intends to seek long-term debt financing.
- 6The acquisition is structured as a stock purchase agreement where Cognizant's subsidiary will acquire 100% of the target entities.
- 7The company is holding a conference call and has provided an investor presentation to discuss the transaction.