Cognizant signed a definitive agreement to acquire Atlanta-based digital video solutions company itaas for an undisclosed amount, the company said Tuesday, deepening its technical capabilities in key vertical markets.
In the Teaneck, N.J.-based company's first acquisition of the year, Cognizant, No. 10 on CRN's Solution Provider 500 list, an annual ranking of the top solution providers in North America by revenue, is adding digital video capabilities to its portfolio, including a broad range of services for traditional cable, broadcast and telecom environments. Being a strong player in that market becomes even more crucial, the company said, as clients look for end-to-end digital solutions and multiplatform capabilities.
Bringing the video solutions into the Cognizant portfolio will allow it to really capitalize on an "exploding" marketplace, Rajeev Mehta, CEO of Cognizant's IT services division, said in an email to CRN.
"With rapid advancements in the TV video streaming industry shifting focus on providing higher interactivity to consumers, the combination of Cognizant's global consulting and delivery capabilities and experience with itaas' deep business and technology insights into the entire video ecosystem will allow Cognizant to offer customers a broader range of services and comprehensive solutions, while driving greater market share, mind share and thought leadership," Mehta said.
Having increased video capabilities will allow Cognizant to push further into vertical markets, Mehta said, including banking, retail and health care. For example, Mehta said the health-care vertical is especially deepening its push into remote telemedicine through video-based interactions.
"The acquisition will enable Cognizant to capitalize on the growing demand for greater interactivity, higher personalization, and innovative content delivery in the multiscreen and video market," Mehta said in his email.
In turn, itaas will benefit from the solution provider's global reach, experience and entrepreneurial culture, Vibha Rustagi, itaas president and CEO, said in a statement, calling the agreement a "major step" for the technology and employees.
Mehta said the acquisition fits in with Cognizant's current growth strategy, based on a mix of organic growth and "tuck-under acquisitions," which the company defines as acquisitions targeted at the $20 million to $80 million range to enhance depth and sophistication in key markets without harming the company culture. The goal is to focus on "capability, not capacity," he said. The company makes acquisitions for three reasons, he said, including expanding the company's geographic footprint, complementing or growing existing solutions, and strengthening consulting capabilities.
"The itaas acquisition is consistent with our acquisition strategy in that it brings end-to-end digital video engineering capabilities that help expand our multiplatform video capabilities, which are in great demand in not only the communications, media and high-technology industries, but also other industries such as banking, retail and health care that are rolling out advanced customer and business platforms centered on video," Mehta said.
Cognizant shares were up around 1 percent on the news Tuesday morning.
PUBLISHED APRIL 22, 2014