Persistent To Acquire Germany's Nagarro In €1.1 Billion Deal To Create $2.9 Billion IT Business

Persistent Systems on 27 June launched a voluntary public takeover offer to acquire all outstanding shares of Munich-headquartered Nagarro SE.

The offer price of €81 per share (valuing the company at €1.1 billion) represents a 140% premium to Nagarro's undisturbed closing price on 25 June and a 94% premium to its three-month volume-weighted average price.

The transaction is expected to close in Q4CY26 or Q1CY27, subject to shareholder acceptance and regulatory approvals.

Persistent Systems shares closed at ₹4,846.50 on 25 June 2026, down 1.66% on the National Stock Exchange (NSE). And on 29 June 2026, the shares continued their downward spiral, trading at ₹4,394, down 9.24%.

Deal Snapshot

Why Is Persistent Acquiring Nagarro?

Europe is set to become a larger market for Persistent through the Nagarro acquisition. The company has also set a target of reaching $5 billion in revenue by March 2031.

The Pune-based IT company reported revenue of $1.7 billion in FY26 and has posted sequential revenue growth for 24 quarters in a row.

The agreement combines Nagarro's proficiency in digital engineering, ERP, and customer experience services with Persistent's advantages in AI, cloud, and software engineering.

On a combined basis, the two companies would have revenue of about $2.9 billion and a workforce exceeding 46,000 people.

Europe would account for roughly 22% of revenue after the deal, compared with about 9% for Persistent today. North America would remain the largest market, contributing around 62%.

The combined business would serve more than 350 client relationships and address a total addressable market estimated at over $1.4 trillion.

Nagarro also brings deep relationships across automotive, industrial, telecom, consumer and BFSI sectors, including four of Europe's five largest automobile manufacturers.

How Will The Deal Be Funded And What Approvals Are Needed?

Persistent has already secured support from Nagarro's largest shareholder, Lantano Beteiligungen GmbH, which has agreed to tender its entire 21% stake.

Nagarro's management board and supervisory board have also backed the transaction and intend to recommend shareholders accept the offer after reviewing the final offer document.

To fund the acquisition, Persistent has arranged committed financing from Barclays.

The company is expected to borrow up to $1.6 billion, a figure that exceeds the equity purchase consideration because part of the facility will be used to refinance Nagarro's existing debt obligations.

Management said both companies generate healthy cash flows and expects future cash generation to support debt repayment over time.

Before the transaction can close, Persistent must secure acceptance from shareholders representing at least 50% plus one share and obtain the necessary regulatory clearances.

The offer document must also receive approval from Germany's financial regulator, BaFin.

Also Read - Stock Market Update 29 June 2026: Sensex, Nifty 50 Edge Ahead After Opening Lower

What Happens To Nagarro After The Acquisition?

Persistent plans to delist Nagarro from the Frankfurt Stock Exchange's Prime Standard segment after the transaction is completed and once legal requirements are met.

The company, however, said it does not intend to enter into a domination and profit-and-loss transfer agreement (DPLTA) for at least two years following the closing of the deal.

Persistent said the acquisition is expected to be earnings-per-share accretive during the first full year after completion.

The company believes the transaction will strengthen its position in digital engineering, AI, ERP and customer experience services while significantly expanding its footprint in Europe.

If completed, the acquisition would rank among the largest overseas deals undertaken by an Indian IT services company and move Persistent up to become India's seventh-largest IT services firm by revenue.

Sources:

Moneycontrol

Mint