Cognizant Acquires TriZetto for US$2.7 Billion

30 Sep 2014
by Abhishek Singh, Nitish Mittal

Executive Summary

On September 15 2014, Cognizant announced the acquisition of TriZetto Corporation (a leading provider of healthcare IT software and solutions) for US$2.7 billion. The deal ties in favorably with Cognizant’s dominant position in the healthcare IT marketplace, with the combined entity having US$3 billion in healthcare revenue. TriZetto has around 3,800 employees across the U.S. and India, who will join Cognizant’s existing healthcare business, which currently serves more than 200 clients. This is by far the largest acquisition by an Indian IT-BPO service provider and unprecedented in scale, intent, and implications to the status quo, but what makes it unique is its focus on industry solutions vs. other services-centric acquisitions. Post the initial brouhaha, the viewpoint presents an analysis along the following lines:

  • The deal’s dynamics and driving rationale
  • What it signifies for Indian IT-BPO service providers
  • What TriZetto brings to the table
  • Implications for Cognizant, buyers, and other service providers

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