Cognizant, an IT outsourcing company with significant operations in India, said Thursday it will acquire Galileo Performance, which provides technology testing consulting services to primarily French customers.
Terms of the deal weren't disclosed.
For Cognizant, Galileo will allow the company to grow its IT systems measurement, management and testing business. Cognizant will also broaden its business in France and acquire a base of French speaking consultants.
Outsourced testing services has been a growth market as companies aim to lower the cost software quality assurance and better test functionality.
Europe represents about 10 percent of Cognizant's revenue. Cognizant executives have recently been making the rounds at investment conferences.
Among the key themes from Cognizant executives and analysts of late:
- Europe remains weak and Cognizant doesn't expect a quick recovery.
- Demand in North America remains stable and spending on analytics software and systems integration are driving business for Cognizant.
- Customers are spending on applications development in a bid to grow revenue.
- Cognizant will continue to expand its consulting practice.
William Blair analyst Bhavan Suri said the following in a research note:
We expect Cognizant’s consulting practice, which we estimate represents about 10% of revenue, to continue to expand and be a material driver of downstream application development and maintenance revenue. It currently staffs over 2,000 consultants (the majority of which reside in India). About 700 consultants are at a senior strategic partner level, which has helped the company increase mindshare with clients and drive faster growth than its peer group. We believe these strategic hires will help the company continue to gain executive mindshare and build deeper relationships with existing accounts.