Persistent Systems bids $2.9B for Nagarro in major IT deal

Key Takeaways

• Persistent Systems offers 140% premium over Nagarro's undisturbed share price, one of the largest overseas acquisitions by an Indian IT firm
• Combined entity will generate $2.9 billion in annual revenue with 46,000+ employees across 40 countries
• Europe's revenue contribution jumps from 9% to 22% of combined company post-acquisition

Persistent Systems has launched a voluntary public takeover offer for German digital engineering company Nagarro SE, offering a 140% premium over Nagarro's undisturbed share price. If completed, the deal creates a technology services firm with $2.9 billion in annual revenue and over 46,000 employees. This ranks among the largest overseas acquisitions by an Indian IT services company.

The offer, made through Persistent's subsidiary Galaxy Germany Holding, is nearly 94% above Nagarro's three-month volume-weighted average price. Persistent has already secured approximately 21% of Nagarro's shares. Its largest shareholder, German investment vehicle Lantano Beteiligungen GmbH, has agreed to tender its entire holding under a binding agreement.

What does the deal mean for Persistent's European expansion?

The acquisition rewrites Persistent's geographic revenue mix. Europe currently accounts for just 9% of Persistent's revenue. Post-deal, that figure jumps to 22% of the combined company. North America remains dominant at 62%, but the European foothold gives Persistent direct access to clients and talent across the continent without relying solely on offshore delivery.

The combined business will have more than 37,000 employees in India, over 3,500 in North America, and more than 3,000 in Europe. This structure positions the merged entity to serve global enterprises with local teams across three major markets.

Which verticals drive the combined company?

The merger creates a company with over $500 million in annual revenue across three sectors: Banking, Financial Services and Insurance (BFSI), Healthcare and Life Sciences (HLS), and Technology, Media and Telecommunications (TMT). Industrial contributes more than $400 million, and consumer adds over $300 million.

Persistent claims the combined total addressable market exceeds $1.4 trillion. That figure, while aggressive, reflects the broad range of digital transformation and AI services the merged firm plans to target.

How did Nagarro's leadership respond?

Nagarro's management and supervisory boards have backed the proposal. Subject to reviewing the final offer document, they intend to recommend shareholders accept.

“Both Nagarro and Persistent have grown from humble beginnings into strong technology powerhouses with high-quality people and deep client relationships. Now, with the AI revolution, we are entering an era that will reward companies like ours that already have a digital-, data- and AI-DNA.”

— Manas Human, cofounder and CEO, Nagarro

Sandeep Kalra, CEO of Persistent Systems, called Nagarro "an exceptional strategic and cultural fit" with "shared values, complementary capabilities, and a common commitment to customer success."

What regulatory hurdles remain?

The offer requires shareholders representing at least 50% plus one share of all outstanding Nagarro shares to accept. Germany's financial regulator BaFin must approve the offer document before the formal tender period begins.

Persistent also plans to delist Nagarro from the Prime Standard segment of the Frankfurt Stock Exchange as soon as legally feasible. However, the company stated it will not pursue a domination and profit/loss transfer agreement (DPLTA), a German structure that grants tighter parent control, for at least two years after closing.

How does this fit Persistent's growth trajectory?

Persistent reported $436 million in revenue for the March 2026 quarter and $1.654 billion for FY26. Management has guided for $500 million quarterly revenue by March 2027, implying a $2 billion annualized run rate. The Nagarro acquisition, if completed, immediately boosts that to $2.9 billion.

The deal signals Persistent's intent to compete at scale with larger Indian IT peers. Infosys, TCS, and Wipro have historically dominated large enterprise deals partly due to their size. A $2.9 billion revenue base puts Persistent in a different weight class for global bids.

Frequently Asked Questions

How much is Persistent paying for Nagarro?

The offer is 140% above Nagarro's undisturbed share price and nearly 94% above its three-month volume-weighted average price. Persistent has already acquired approximately 21% of Nagarro's shares.

When will the Persistent-Nagarro deal close?

The formal offer launches after Germany's BaFin regulator approves the offer document. The deal requires acceptance from shareholders holding at least 50% plus one share of Nagarro.

Will Nagarro remain listed after the acquisition?

No. Persistent plans to delist Nagarro from the Frankfurt Stock Exchange as soon as legally feasible following the deal's completion.

How many employees will the combined company have?

Over 46,000 employees across more than 40 countries, including 37,000+ in India, 3,500+ in North America, and 3,000+ in Europe.

Source: Tech-Economic Times / ET