The trade-off in the Persistent-Nagarro deal is hard to ignore
New Delhi, June 29 -- The Persistent Systems Ltd. stock fell 10% on Monday, hitting a 52-week low of Rs.4,312 following the acquisition of Munich-based Nagarro SE-its largest ever at an enterprise valuation of €1.27 billion. Persistent has bought a 21% stake in the digital engineering firm and intends to acquire a 100% stake via an open offer.
The all-cash transaction includes net debt of about €268 million, to be funded through bridge financing of €1.4 billion. The acquisition is expected to be earnings per share-accretive from the first year, excluding transaction costs.
The deal aligns with Persistent's long-stated goals of reducing exposure to the US market (81% of revenue mix), reaching $5 billion revenue by FY31 ...
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