Cognizant acquires Utegration to scale up SAP Capabilities

Cognizant, a leading global professional services firm, has recently acquired Utegration to strengthen its position as a leader in SAP service capabilities. The acquisition makes Cognizant one of the largest SAP-certified partners.

On Wednesday, Nasdaq-listed Cognizant Technology Services announced that it has agreed to acquire Houston-based Utegration. As a full-service consulting and solutions provider specializing in SAP technology and certified products for the energy and utility sectors, this will be an excellent addition to Cognizant’s business.

Upon the close of the acquisition, which is expected to happen by year-end 2022, Cognizant will add an additional 350 employees in North America and India. We are eagerly awaiting financial details.

At Utegration, they serve more than 50 clients in the energy and utility sector across North America. Their solutions are aligned with key market needs in four domains: customer experience, billing, and advanced metering infrastructure; finance & asset performance management, data science and analytics; and managed services.

CEO Brian Humphries has led Cognizant in three years of successful acquisitions. In the past, they were very aggressive in their mergers and acquisition strategies, but this year they have only made 3 acquisitions to date- a more conservative approach.

Last week, in an effort to expand its capabilities and help clients with their digital strategies, Cognizant acquired digital transformation consulting company AustinCSI.

On November 1, Cognizant announced its acquisition of OneSource Virtual- a professional services and application management company based out of Texas. This will further enhance its existing finance and HR advisory implementation services with Workday.

The company’s digital revenue growth has slowed down compared to the last year because it hasn’t been acquiring new businesses. In Q3, digital revenue increased by either 7% year-on-year (reported terms) or 11% (constant currency), which accounted for around 51% of total revenue for the quarter. This is 2 points higher than last year’s corresponding period.

Jan Siegmund, the company’s chief financial officer, said this during the last quarterly earnings report-

“Our slower digital revenue growth reflected the expected lower inorganic contribution we discussed last quarter and the lower billable headcount in North America mentioned earlier.”

By the end of this year, global IT spending in the power and utility market is projected to reach $175 billion according to research firm Gartner. The increase is due largely in part to initiatives involving clean energy, grid modernization, and customer experience management.

With the Utegration acquisition, Cognizant is banking on its ability to better serve its customers in this highly competitive market. This will also help them tap into new opportunities, and deliver more innovative digital solutions. We are excited to see how this move helps Cognizant in the years to come. Let’s stay tuned to see how this acquisition plays out!

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