Persistent uses Nagarro acquisition to strengthen Europe, ERP and CX capabilities in USD 2.9 billion AI play

The deal goes beyond adding scale as Persistent expands its European business, enterprise applications portfolio and industry expertise to support larger AI-led transformation programmes.

Persistent Systems plans to acquire Germany-headquartered Nagarro through a voluntary public takeover offer of EUR 81 per share, creating a combined AI-led digital engineering business with a revenue run-rate of approximately USD 2.9 billion and over 46,000 employees across 40 countries.

While the acquisition increases Persistent's scale, it also addresses several strategic priorities for the company.

The transaction expands Persistent's presence in Europe, adds enterprise resource planning (ERP) and customer experience (CX) capabilities, broadens its industry expertise and strengthens its ability to deliver end-to-end AI, cloud, data and enterprise modernisation programmes for global customers.

Persistent has signed a Business Combination Agreement with Nagarro and has already secured an approximately 21 percent stake in the company through a binding agreement with Nagarro's largest shareholder. Nagarro's Management and Supervisory Board support the transaction and intend to recommend that shareholders accept the offer.

Europe becomes a larger part of Persistent's business

One of the biggest strategic outcomes of the acquisition is the expansion of Persistent's European business.

While Persistent has built a strong presence in North America over the years, the company has had a relatively smaller footprint in Europe. Nagarro significantly changes that equation.

The transaction significantly strengthens Persistent's European business. Following the acquisition, Europe is expected to contribute 22 percent of the combined group's revenue, compared with Persistent's 9 percent European revenue share in FY26. North America will account for 62 percent of revenue, while the Rest of the World will contribute 16 percent.

The combined organisation will generate over USD 1.7 billion in North America and over USD 600 million in Europe.

For enterprise customers, this gives Persistent a stronger local presence across two of the world's largest technology spending regions while enabling it to support multinational organisations through both regional and global delivery models.

Nagarro also brings long-established customer relationships across Europe, including engagements with four of Europe's top five automotive manufacturers, further strengthening Persistent's position in the industrial and manufacturing sectors.

The acquisition expands capabilities beyond AI engineering

Much of the industry discussion around the transaction has centred on AI. However, the acquisition also broadens Persistent's enterprise technology portfolio.

Persistent has established itself in AI-led software engineering, cloud, data and digital transformation. Nagarro complements those capabilities with deeper expertise in ERP, CX, digital engineering and enterprise modernisation.

Together, the companies aim to support enterprise customers across the complete transformation lifecycle, combining AI engineering with enterprise applications, cloud platforms, data services and customer engagement technologies.

The combined business also broadens Persistent's partner ecosystem across hyperscalers, ISVs and frontier AI labs, while strengthening its ability to deliver integrated AI, engineering, ERP and CX programmes.

For technology partners operating across enterprise software ecosystems such as ERP, cloud and customer experience platforms, the transaction creates a larger enterprise technology services organisation with broader engineering and implementation capabilities.

The acquisition also expands Persistent's industry footprint.

According to the companies, the combined organisation will have over 350 marquee enterprise customers, including relationships with seven of the top 10 US and Indian banks, eight of the top 15 healthcare and life sciences companies, and four of Europe's top five automotive manufacturers.

The combined company expects to have over USD 500 million in revenue across each of Banking, Financial Services and Insurance (BFSI), Healthcare and Life Sciences, and Technology, Media and Telecommunications (TMT). It will also establish strong positions in the industrial and consumer sectors, with over USD 400 million and USD 300 million in revenue, respectively.

This diversified customer and industry mix strengthens Persistent's ability to pursue larger multi-country transformation programmes across regulated industries and manufacturing sectors.

India remains the engineering and delivery hub

Although the acquisition strengthens Persistent's presence in Europe, India will continue to be the company's largest engineering and delivery base.

The combined organisation will employ over 46,000 people, including over 37,000 employees in India, approximately 3,500 in North America, and around 3,000 in Europe.

This gives Persistent one of the largest engineering workforces among mid-tier global technology services companies while supporting delivery across North America, Europe and other international markets.

The acquisition also combines Persistent's engineering-led delivery model with Nagarro's local engineering presence across over 40 countries, enabling the company to support enterprise customers through a mix of local consulting and global delivery capabilities.

Beyond increasing its workforce and revenue, the acquisition reflects Persistent's strategy of expanding into a broader enterprise transformation partner.

The combined company will bring together AI-led software engineering, enterprise applications, cloud, data, ERP, customer experience and digital engineering capabilities under a single organisation.

According to Persistent, this combination enables it to support enterprise customers from AI strategy and application development through enterprise modernisation and measurable business outcomes.

The company also expects the acquisition to strengthen its AI Forward Deployed Engineering capabilities by combining AI-skilled talent, engineering platforms and delivery expertise from both organisations.

Following the transaction, the combined Persistent-Nagarro Group will continue to preserve both brands while integrating their respective capabilities.

Transaction expected to close by early 2027

Persistent will fund the acquisition through committed financing from Barclays.

The offer remains subject to a minimum acceptance threshold of 50 percent plus one share of all outstanding Nagarro shares, including the shares acquired under the binding agreement with Nagarro's largest shareholder and the shares expected to be tendered by members of Nagarro's Management Board.

The transaction also requires regulatory approvals, including approval of the offer document by Germany's Federal Financial Supervisory Authority (BaFin).

Persistent expects the acquisition to close in Q4 CY2026 or Q1 CY2027.

Following completion, the company intends to pursue the delisting of Nagarro from the Frankfurt Stock Exchange's Prime Standard segment as part of its take-private strategy. Persistent also said it does not intend to enter into a domination and profit-and-loss transfer agreement (DPLTA) for two years following the transaction closing.