Cognizant Enters Bid for Citius Tech Amid Waning Interest from Private Equity Firms

Cognizant Enters the Fray for Citius Tech, Potential Controlling Stake Transaction on the Horizon

Cognizant Technology Solutions, a Nasdaq-listed Indian heritage tech services major, has entered the ongoing stake sale process at EQT and Bain Capital-backed Citius Tech, a healthcare technology services provider. Industry sources close to the matter informed Moneycontrol that Cognizant's entry into the fray has led to a significant shift in the dynamics of the deal, with private equity players Temasek and ChrysCapital dropping out.

According to sources, the stage may now be set for a controlling stake transaction, rather than the earlier planned "joint control" arrangement. This development comes amidst a challenging phase for the global IT sector, with pressures related to AI transition, talent, and evolving regulations.

EQT had initially acquired a majority stake in Citius Tech in 2019 and later sold a part stake to Bain Capital, which currently holds around 40% of the company. The sell-side expectation for CitiusTech had been a valuation of north of $2.2 billion, with the last round of investment with Bain Capital valued at $2.45 billion. On the other hand, the buy-side was looking at a $1.5 billion to $1.8 billion range.

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Cognizant's entry into the deal is seen as a strategic move to further augment its capabilities and shore up revenues in the healthcare segment. The company has begun work on the proposed transaction and is evaluating a cash-stock deal structure combination. This structure could potentially allow for both PE players to make an exit if deemed fit and a 100% sale as well.

Other strategic players, including domestic IT giant Infosys, may also be evaluating the opportunity depending on their inorganic strategy. However, the ongoing discussions may not necessarily fructify into an eventual transaction, depending on market conditions and deal dynamics.

Cognizant's spokesperson declined to comment on the matter, while EQT, Bain Capital, and Temasek chose not to respond to email queries. Infosys, Citius Tech, and ChrysCapital did not respond to emails at the time of publishing this article.

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In related news, Cognizant is set to acquire artificial intelligence infrastructure services firm Astreya in a deal valued at around $600 million. The company is also expected to incur between $230 million and $320 million in severance costs under its newly announced Project Leap.

Infosys, on the other hand, has been on the prowl for assets in recent times and has sealed two acquisitions and one joint venture in FY26. The company's acquisition strategy going ahead is focused on expanding its healthcare work, insurance, and industry verticals.

Led by CEO Rajan Kohli, an ex-Wipro senior executive, Citius Tech has a presence in North America, UK, Middle East, and Europe, with India offices in Mumbai, Chennai, Hyderabad, Bengaluru, Pune, Gurgaon, and Noida. The company enables "140+ enterprises to build a human-first ecosystem that is efficient, effective, and equitable" through deep domain expertise and next-generation technologies.