Persistent Systems announced plans to acquire 100% of Nagarro for EUR 81 per share in cash. The combined entity aims to become an AI-led digital engineering powerhouse with over 46,000 employees and $2.9 billion in revenue. The deal is expected to be EPS accretive.
Persistent Systems to Acquire Nagarro in EUR 81/Share Cash Deal
Persistent Systems will acquire 100% of Nagarro for EUR 81 per share in cash, creating a combined entity with over $2.9 billion in revenue and 46,000+ employees. Reader Takeaway: Strengthened global presence and AI capabilities with integration risks. ## What just happened Persistent Systems has entered into a definitive agreement to acquire 100% of Nagarro. A voluntary public takeover offer of EUR 81 per share in cash has been extended. Persistent has already secured a stake of approximately 21% through a Share Purchase Agreement. The transaction is supported by the management of both companies. ## Why this matters This acquisition aims to create a transatlantic, AI-led digital engineering leader. It will significantly expand Persistent's global footprint, particularly in Europe, and enhance its capabilities in core software engineering, data, and AI workflows. The deal is projected to be Cash EPS and Reported EPS accretive within the first year post-acquisition. ## The backstory Persistent Systems, with its FY26 revenue at $1,654 million and an EBIT margin of 15.6%, is a significant player in digital engineering. Nagarro's TTM Mar'26 revenue stands at EUR 1,001 million with an Adjusted EBITDA margin of 13.9%. This acquisition represents a major strategic move to scale operations and geographic reach. ## What changes now The combined entity will have a more balanced global presence, merging Persistent's North American strength with Nagarro's European base. The focus will be on advancing AI-led services, including Physical and Industrial AI, leveraging Nagarro's expertise in automotive and manufacturing. ## Risks to watch Key risks include securing regulatory approvals, particularly in Germany, the successful integration of Nagarro's operations, and achieving projected synergy targets to maintain EPS accretion. Managing the leverage ratio below 1.0x by FY30 will also be crucial. ## Peer comparison Persistent Systems operates in the competitive digital engineering and IT services sector. Competitors include companies like TCS, Infosys, Wipro, and HCLTech, among others, who also focus on digital transformation and AI. This acquisition aims to position Persistent more strongly against these larger players in specific service areas. ## Context metrics (time-bound) The offer price is EUR 81 per share. The deal is expected to close between Q4 CY26 and Q1 CY27. The financing includes a EUR 1.4 billion bridge facility. The leverage ratio is projected between 1.9x and 2.5x post-offer, with a target to reduce it below 1.0x by FY30. ## What to track next Investors should monitor the progress of regulatory approvals, the consummation of the takeover offer, and the initial phases of post-merger integration. The company also announced a significant deal win with an Annual Contract Value (ACV) of over $125 million and a Total Contract Value (TCV) exceeding $650 million over 6.5 years, which should be tracked for its impact on growth.
