Persistent Systems to buy Nagarro for €81 a share in $1.6B deal

Persistent Systems Ltd. announced a voluntary public takeover offer for all outstanding shares of German digital engineering firm Nagarro SE at €81 per share in cash, creating a combined AI-led digital engineering group with a $2.9 billion revenue run-rate.

"The shared foundation gives us confidence that together we can create something even stronger," said Anand Deshpande, founder, chairman and managing director at Persistent Systems. "AI is reshaping our industry at an unprecedented pace. Success will belong to companies that combine deep technical capability with global reach."

The €81 offer represents a 140 percent premium to Nagarro's undisturbed closing price on June 25 and a 94 percent premium to its three-month volume-weighted average price. Persistent has secured a binding agreement with Lantano Beteiligungen GmbH, Nagarro's largest shareholder, to acquire its 21 percent stake at the offer price. Nagarro's management and supervisory boards have backed the transaction and intend to recommend acceptance to shareholders.

The acquisition positions Persistent to compete for large-scale enterprise AI and digital transformation contracts that require multi-region delivery capabilities. The combined Persistent-Nagarro Group will employ more than 46,000 people across over 40 countries, with about 37,000 in India, nearly 3,500 in North America and around 3,000 in Europe. Persistent reported $1.7 billion in revenue for fiscal year 2026, while Nagarro generated about €1 billion in calendar year 2025.

Deal Structure and Financing

Persistent is executing the acquisition through its wholly owned German subsidiary, Galaxy Germany Holding SE, which has signed a Business Combination Agreement with Nagarro. The tender offer is subject to a minimum acceptance threshold of 50 percent plus one share, inclusive of the Lantano stake. The company has secured a €1.4 billion bridge financing facility from Barclays Bank PLC, backed by a corporate guarantee of up to €1.54 billion for an 18-month term. Assuming full debt funding, the total acquisition cost could reach approximately $1.6 billion.

Post-acquisition, Persistent plans to delist Nagarro from the Frankfurt Stock Exchange's Prime Standard segment as soon as legally feasible. The company said it does not intend to enter into a Domination and Profit or Loss Transfer Agreement for at least two years after closing. The transaction is expected to close by the end of 2026 or during the first quarter of 2027, pending regulatory approvals and clearance of the offer document by Germany's BaFin.

The deal significantly strengthens Persistent's European footprint. Europe will account for about 22 percent of the combined company's revenue, up from 9 percent for Persistent on a standalone basis in fiscal year 2026. North America will contribute approximately 62 percent, with the rest of the world at 16 percent. The combined entity's total addressable market expands to more than $1.4 trillion, with a client roster that includes four of Europe's top five automotive manufacturers, seven of the top 10 U.S. and Indian banks, and eight of the top 15 healthcare and life sciences companies.

Persistent said the transaction is expected to be cash earnings per share accretive in the first year after completion. The combined group will have more than $500 million in revenue in each of the banking and financial services, healthcare and life sciences, and technology, media and telecom sectors, with industrial revenue at about $400 million and consumer at $300 million.

This article is for informational purposes only and does not constitute investment advice.