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Cognizant to acquire marketRx for $ 135 mn

Written by: Staff

Chennai/Bangalore, Oct 21: Cognizant Technology Solutions, an IT and BPO services company, is said to acquire marketRx, a New Jersey-based firm. Congnizant will pay $135 million in cash to acquire marketRx, a provider of analytics and related software services to life sciences companies.

It"s the biggest acquisition made by Cognizant so far, and among the biggest in high-end business process outsourcing space recently. In a deal structured on Thursday night, Cognizant is believed to have pipped IT services giant Infosys Technologies in bagging the deal.

This is the second high-profile deal-making in the KPO space, after WNS snapped up Bangalore headquartered Marketics for $65 million earlier this year. Sources said while Infosys" valuation of the marketRx was higher, Cognizant offered upfront cash pay out. It is believed that Infy"s offer had a substantial chunk of earnings payout, which essentially means a combination of upfront money and the remaining to be based on future performance.

The Nasdaq-listed Cognizant with predominant operations in India said the acquisition would help strengthen its analytics unit and offer more services to life sciences industry. The deal is expected to close in fourth quarter of 2007, and would be funded from its cash reserves. marketRx with per employee revenue of about $100,000 is projected to report revenues of over $40 million in 2007. It has 430 people, with 260 in Gurgaon, 160 in the US (four locations), and 10 in London.

Cognizant is expected to cross 55,000 people by end of this year and with revenue guidance of $2.11 billion in 2007. It"s manpower addition this year is expected to be over 16,000, 40 times the strength of marketRx. Cognizant president R Chandrasekaran said, “It is a 'tuck-under" acquisition that is consistent with our acquisition strategy of selectively acquiring businesses that complement or enhance our business model and value to our customers.

Cognizant president and CEO Francisco D"Souza said, “This acquisition expands our capabilities in the analytics segment and broadens our service offerings for the life sciences industry while providing strong synergies with our existing business intelligence/data warehousing and CRM (customer relationship management) services."

marketRx has a proven global delivery model for analytics, deep domain knowledge and proprietary analytics software platform, he said. “We expect to leverage these assets to establish a pre-eminent position in the fast-growing analytics market both in life sciences and other industries," Mr D"Souza said in a statement.

marketRx president&CEO Jaswinder (Jassi) Chadha said, “The combination of our market leading position in the life sciences analytics segment and Cognizant"s strengths as a top global services player will allow us to expand our relationships with our life sciences clients by providing them with a broader range of outsourced services, and conversely enables us to extend our capabilities to other vertical markets."

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