Narayan AmmachchiUS information technology services firm Cognizant has snapped up Norwegian IT and BPO services provider Frontica Business Solutions for US$128 million.
Frontica runs delivery centers in Brazil, Malaysia, the UK, and the United States, with a majority of its staff based in Norway. Reports say it has about 570 people on its payroll.
Starting as an IT service unit for Akastor, Frontica graduated to provide restructuring and migration services for global oil and gas firms. Today it offers SAP consulting, payroll solutions, and other IT consultancy services.
The company claims to have an order backlog worth US$637 million.
“Frontica has undergone an impressive organizational development and will now benefit further from Cognizant’s scale, market position, and technology infrastructure,” said Akastor’s CEO Kristian Rokke.
Frontica’s parent company Akastor, Norwegian oil service major, has clarified in a statement that the transaction does not include Frontica’s HR outsourcing business, Frontica Advantage.
The continued downtrend in the global oil & gas industry could be seen as the reason behind the spin-off. Akastor itself admitted that it had just begun transforming Frontica from an internally-focused shared service unit into a commercial provider of ITO and BPO services within the oil and gas industry.
Cognizant says it would expand Frontica’s business into new segments and geographies going forward. “Together, we will create even greater value for our clients in the Nordics and other geographies,” said Cognizant’s senior executive Santosh Thomas.
This is Cognizant’s third acquisition this year after purchasing US-based digital services firm Idea Couture and cloud services firm KBACE Technologies. Also, it bought a 49% stake in ReD Associates that specializes in identifying customer behavioral pattern.
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