Coforge, Cigniti forge ahead with proposed merger
Coforge and Cigniti Technologies are moving a step ahead toward a planned merger. The two companies have appointed EY and Axis Capital to prepare merger terms, which they intend to propose to their respective shareholders within a fortnight, according to people aware of the matter.
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As per the merger plan, Coforge will absorb the listed Cigniti Technologies. Coforge’s market capitalisation has doubled to more than Rs 62,000 crore in the past seven months. Cigniti Technologies shareholders will be issued shares of Coforge once the advisers come up with an acceptable swap ratio, according to the people cited. Coforge, formerly known as NIIT Technologies, owns a 54% stake in Cigniti Technologies.
Coforge had announced the acquisition of the majority stake in Cigniti Technologies on May 2. It subsequently launched an offer of its own shares later that month through the qualified institutional placement (QIP) route to raise Rs 2,240 crore to finance the acquisition of Cigniti shares.
According to the QIP documents seen by ET, Coforge’s clients in North America are largely located on the east coast whereas Cigniti has customers in the west and Midwest, making for synergy.
The companies, EY and Axis Capital didn’t respond to queries.
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