Cognizant signs $75-million acquisition deal for UBS' Indian captive division

UBS India Service CentreMarking its biggest acquisition deal in terms of people takeover, multinational services firm Cognizant Technology Thursday signed a $75 million agreement to buy out Switzerland bank UBS Group's captive Indian division - UBS India Service Centre (UBS ISC).

The deal, which is Cognizant's second largest deal in terms of value after its $135million-worth acquisition of MarketRx, will likely yield Cognizant a $442 million revenue over the next five years. It also bundles an outsourcing contract including knowledge process outsourcing and work beyond back office, along with the possibility of involving application development and IT hardware management.

The Hyderabad-based UBS ISC has a workforce of 2,000 highly-skilled employees, and it provides a wide array of services, including wealth management, asset management, investment banking, research and remote IT infrastructure.

Noting that Cognizant is among the top five companies providing technological services for the financial services sector, the company's vice-chairman Lakshmi Narayanan told ET NOW that the UBS ISC acquisition will help the company further fortify its position and expand its services.

Narayanan said: We have significant revenues coming from the US whereas the USB ISC has more than half its revenues coming from APAC and Europe regions. So, this helps in diversifying our revenue base."

In a filing with the SEC, Cognizant said that the transaction will expectedly come through in December 2009, once some mandatory closing conditions are fulfilled.