Cognizant, the Nasdaq-listed $1 billion software services firm, is learnt to be zeroing in on a buyout in the business process outsourcing space. The company, a relatively late entrant in this field, is going the inorganic way to ramp up its presence.
According to market sources, the company is in the final leg of negotiations to buy out the BPO firm and this deal, it is expected, will significantly strengthen its offerings. Cognizant, however, declined to comment on the deal.
Market sources indicate that there are quite a few large standalone BPO firms in India, which have built up the momentum, expertise and scale and is ripe for buyouts.
Cognizant does not report separate revenue or manpower figures for its BPO operations. A spokesperson for Cognizant said that their BPO operations are vertically integrated with their IT offerings in the financial services, life-sciences and healthcare sectors.
According to market indications, Cognizant is looking at beefing up its BPO offerings for the media, manufacturing and retail verticals in the near future.
Currently, financial services account for around 50 per cegnt of the company revenues, with healthcare & life-sciences contributing to 20 per cent, while 17 per cent comes in from the manufacturing vertical.
This is the second time that Cognizant is zeroing in on an acquisition in India after an attempt to take over Bangalore-based software testing firm RelQ fell through. That deal was, however, was on a small scale and the current BPO deal is expected to be of a larger proportion.
Cognizant for the year-ended 2005 had a top line of $885 million and the guidance for the first quarter is at around $275 million. For the entire year, the company is looking at a topline of $1.26 billion. Cognizant has close to 26,000 employees and is expecting to total up to 35,000 by end of 2006.Are you working at a BPO, or planning to work at one? Join the BPO Discussion Group