The AimNet acquisition is a tuck-under one consistent with Cognizants acquisition strategy of selectively acquiring businesses that complement its business model
Cognizant Technology Solutions has recently acquired AimNet for a total consideration of $15 million in cash. AimNet, a the privately-held company with over 100 employees, has expertise spanning a wide spectrum of IT infrastructure such as LAN, WAN, VPN, Security, IP Telephony, Server and Application support, etc.
This acquisition is widely seen as a move to enhance the IT infrastructure services of Cognizant. R Chandrasekharan, managing director of Cognizant, spoke to R Jai Krishna of CyberMedia News about this acquisition and the plans ahead. How much revenue do you expect AimNet will add to Cognizant’s top-line this year?
AimNet is a private company and given that this acquisition is strategic, but not material to the financials of our business, we are not disclosing its revenues, profit margins or detailed financials at this time. As appropriate, we will provide additional information during our Q3 earnings call.
How much of AimNet’s revenue come from managed services vs. professional or consulting services?
About two-thirds of AimNet’s revenue currently comes from managed services. Consulting services contribute the remainder.
We acquired AimNet because of their highly regarded network management services, which we expect will strengthen Cognizant’s infrastructure management practice and its US management team. We would consider this a “tuck-under” acquisition that is consistent with our acquisition strategy of selectively acquiring businesses that complement our business model. We will continue to look for companies to acquire that are of a manageable size and meet our acquisition criteria, either in geographical, vertical or horizontal segments.
Cognizant has been making at least one acquisition in each of the last four years. What’s the philosophy towards acquisitions and which are the other areas that you are looking at for acquisitions?
Yes, AimNet is Cognizant’s seventh acquisition in the last five years, but all of them have been small or tuck-under acquisitions. We have made three acquisitions in the US (ACES, American Express account from Silverline Technologies and Fathom), two in Europe (UHG and Infopulse) and one in India (Ygyan).
Cognizant’s philosophy for acquisitions is three-pronged—to strengthen our domain capabilities, to fill in the gaps or strengthen our solution offering, or to strengthen our geographic spread. We continually look for acquisition opportunities in one or more of these three areas and, depending on the strategic and cultural fit, exercise our choice.
How many customers have AimNet brought to Cognizant?
AimNet has over 80 direct customers across various industries, 10 of which are channel re-sellers reaching a total of close to 700 end-user companies. Some of them are large/blue-chip companies.
How will this deal benefit Cognizant’s existing customers?
For our customers who are seeking infrastructure management services, the combination of Cognizant’s Infrastructure Management Practice and AimNet’s capabilities creates a scalable, efficient service with sophisticated global delivery capabilities that will prove to be very compelling. The integration of AimNet with Cognizant will create a single, seamless global operations center, managed with common network operating center (NOC) tools and processes across both the US and India.
