Counterparty: An existing global technology leader headquartered in the US (name undisclosed due to NDA)
Scope: Net new business for end-to-end product engineering and product support for a significant portfolio of products globally
Timing: Revenue and margin accretion expected from Q2 FY2027 onwards
Rationale: Described as a testament to Persistent's engineering prowess, deep domain expertise, and AI capabilities
2. Acquisition of Nagarro SE
Transaction Structure: 100% acquisition via a voluntary public takeover offer
Offer Price: €81 per share in cash
Enterprise Value: €1.27 billion
Equity Value: €1.0 billion (based on 12.4 million outstanding shares excluding treasury)
Net Debt: €267 million (as reported by Nagarro)
Premium: 140% to undisturbed closing price on June 25-26, 2026; 94% to 3-month volume weighted average price
Valuation Multiples: 1.27x EV/Revenue and 9.12x EV/EBITDA based on CY2025 figures; multiples drop to ~7.73x EV/EBITDA using upper end of CY2026 guidance
Minimum Acceptance Threshold: 50% + 1 share for the open offer to proceed
Transaction Details and Financing
Pre-Transaction Commitments
Share Purchase Agreement: Secured 21% stake from major shareholders
Management Commitment: Nagarro management board has expressed interest to tender their shares (~13-14% stake)
Board Support: Both Nagarro boards fully support the transaction and have signed a business combination agreement
Financing Structure
Facility: €1.4 billion committed bridge financing from Barclays
Interest Rate: Euribor plus margin of 175-250 basis points (currently translating to 4.1%-4.8% range)
Corporate Guarantee: Persistent Systems Limited will provide a corporate guarantee of €1.4 billion
Use of Funds: Includes refinancing of Nagarro's existing debt if required, and outstanding accrued interest
Financial Impact and Projections
Leverage: Net Debt/combined EBITDA expected at 1.9x-2.5x based on open offer acceptance (50%+1 to 100%); target to reduce to 1x by FY2030
EPS Accretion: Projected to be cash EPS accretive and reported EPS accretive (excluding transaction expenses) in Year 1
Goodwill & Intangibles: Anticipated ~70% goodwill and 30% other intangibles amortized over 8 years
Synergies: Revenue and cost synergies to be detailed post-regulatory approvals; management emphasized this is an expansion play rather than cost consolidation
Strategic Rationale for Acquisition
Complementary Strengths
Geographic Diversification: Combines Persistent's strong North American presence (81% of revenue) with Nagarro's European focus (significant revenue from Europe)
Vertical Expansion: Adds Nagarro's strengths in industrial, consumer, and public sectors to Persistent's TMT, BFSI, and HLS focus
Service Line Enhancement: Nagarro brings strong ERP and OpenAI capabilities; Persistent brings CX and other digital engineering strengths
Cultural Alignment: Both companies described as "engineering-first" with entrepreneurial cultures and significant Indian delivery presence
Combined Entity Metrics
Revenue: $2.9+ billion
Employees: 46,000+ team members globally
Geographic Reach: 40+ countries
Revenue Mix: North America 62%, Europe 22%, Rest of World 16%
Market Position: Would become 2nd largest digital engineering player globally and 7th largest technology services company among India-listed firms
Due Diligence and Regulatory Matters
Historical Queries Addressed
Management addressed BaFin queries Nagarro received related to its carve-out from Allgeier and accounting principles
Persistent expressed confidence these were regulatory response matters without impact on company performance or practices
Conducted legal/tax diligence with appropriate responses from management
Regulatory Timeline
Next 4 weeks: Filing documents with German regulatory authority BaFin
BaFin Review: Expected 10 working days to two weeks for offer document clearance
Acceptance Period: 4 weeks for voluntary public offer, with possible 2-week extension
Persistent AGM: Scheduled for last week of July 2026 to seek shareholder approval for the transaction
Expected Closing: Q4 CY2026 or early Q1 CY2027
Integration Approach: No domination/profit loss transfer agreement for two years; planned integration execution over time
EBIT Margin: 10.9% for CY2025; 12.1% for Q1 CY2026
Business Model: ~68% time and material
Operational Highlights
Headquarters: Munich, Germany
Employees: 18,500 professionals (13,500 in India, 1,500+ in rest of world)
Management: Seasoned board including founders Manas Fuloria and Vikram Singh, complemented by Annette (6+ years) and Prateek Aggarwal (recently joined as CFO)
Key Partnerships: SAP (product engineering and implementation), OpenAI (accredited reseller with forward-deployed engineering practice)
Customer Base: 180+ logos with $1 million+ revenue; less than 10 customers with significant overlap with Persistent
Q&A Session Highlights
Valuation and Due Diligence
Management defended premium paid as reasonable for a control transaction of a complementary asset
Emphasized value acquisition over buying cheap, citing cultural fit and strategic complementarity
Growth and Margin Prospects
Expressed confidence in improving Nagarro's growth trajectory through Persistent's operational rigor and technical capabilities
Target to maintain combined margins at or above Persistent's current levels (15.6% EBITDA margin, 12.6% PAT margin)
Planned to reinvest cost synergies into growth initiatives rather than margin expansion
Integration Strategy
Management committed to staying on; European leadership expected to take expanded roles in their strength areas
Significant cross-selling opportunities identified across complementary verticals, geographies, and service lines
Customer mining potential emphasized with 350+ $1 million+ accounts across combined entity
Financing and EPS Accretion
EPS accretion math based on 70-30 goodwill-intangibles split, intangibles amortized over 8 years
Interest expense tax-deductible; confident in debt servicing through combined cash generation
Options open for potential private equity participation at asset level for deleveraging (no QIP planned at Persistent level)
