Persistent to take over German digital engineering firm Nagarro

Pune–headquartered IT services company Persistent Systems on Saturday said it is looking to take over the Frankfurt Stock Exchange-listed German digital engineering firm Nagarro at an offer price of €81 per share. This is at a premium of approximately 93.5% over Nagarro’s weighted average share price of the last three months.

Persistent has already signed an agreement to take over the 21% stake of Nagarro’s largest shareholder, Lantano Beteiligungen GmbH, through its wholly-owned German subsidiary, Galaxy Germany Holding SE. Persistent, through Galaxy, will be making a voluntary open offer to take over all outstanding shares in Nagarro. According to the Indian IT services company’s release, given that Nagarro’s Management and Supervisory Board is supporting the transaction and intending to recommend the acceptance of the offer, founder Manas Human, who holds  6% stake, is also expected to be on board. Nagarro’s other large shareholders include Detlef Dinsel (10.13%); StarView Capital Growth Fund, LLC (6.67%); and All Nag Beteiligungs-GmbH & Co. KG (6%). The takeover offer process is expected to be completed by the end of 2026 or during the Jan-March quarter of 2027.  

Anand Deshpande, founder, chairman and MD of Persistent Systems, that the two companies shared the same values, same engineering focus and the same entrepreneurial spirit. “That shared foundation gives us confidence that together we can create something even stronger. AI is reshaping our industry at an unprecedented pace. Success will belong to companies that combine deep technical capability with global reach, while continuing to attract, develop, and inspire exceptional people,” he said in a statement  

Deal structuring and funding  

The takeover is being proposed through Persistent’s wholly owned subsidiary Galaxy, which has already signed a share purchase agreement with Lantano Beteiligungen, Nagarro’s largest shareholder, for its 21% stake in the company in an all-cash transaction at €81 per share. The tender offer will be subject to a minimum acceptance of over 50%, inclusive of shares acquired under the share purchase agreement with Lantano. According to Nagarro's exchange filings, the members of the management Board of Nagarro also intend to tender their privately held blocks of shares into the offer, and the open offer is expected to be completed by the end of 2026 or the first quarter of CY2027.  

To fund this all-cash deal, Persistent has signed up with Barclays Bank PLC for a bridge financing facility of €1.4 billion by executing a corporate guarantee of up to €1.54 billion  for a term of 18 months. Assuming the entire acquisition of shares is debt-funded, through this bridge financing facilities the cost of the Nagarro acquisition could be up to $1.6 billion. Given that Persistent has stated that   does not intend to enter into a Domination and/or Profit and Loss Transfer Agreement (DPLTA),for a period of two years, clarity is still awaited on how Nagarro's debt of around 300milliom euros will be retire. After the takeover, Persistent intends to delist Nagarro from the German stock exchange. 

What the acquisition means in the Indian IT space 

Post-acquisition, the combined business entity, the Persistent-Nagarro Group, will be a nearly $3-billion company. While Coforge had surpassed Persistent with Encora’s acquisition to $2.5 billion in revenue, this move brings Persistent back on top of the mid-cap revenue table.

Munich-headquartered Nagarro has an annual revenue of over $1.3 billion and has nearly 18,500 employees across 40-plus countries. With its full-stack solutions across digital engineering, intelligent enterprise, and experience & design, the acquisition gives Persistent an edge in both Europe and America. With the acquisition, Persistent’s European revenue share would be increasing to 22% from 9% (in FY26). The combined Persistent–Nagarro Group would have North America accounting for 62% of revenues, with the share of the Rest of World increasing from 10% to 16%. 

Sandeep Kalra, ED & CEO, Persistent Systems, sees this combined entity aiding in tapping the next wave of enterprise transformation driven by AI.  “This combination strengthens our position in Europe, expands our scale in North America, and enhances our ability to help clients accelerate their AI and digital transformation journeys. Together, we are creating one of the industry's leading AI-led, engineering-driven digital transformation companies, creating greater opportunities for our clients, our people, and all our stakeholders,” he said in a statement.  

According to Nagarro’s latest quarterly filings, its Q12026 revenue grew to €248.1 million from €246.9 million in Q12025, a growth of 0.5% and YoY constant currency revenue growth of 6.5%. Organic YoY revenue growth for Q12026 was 4.8% in constant currency terms. Nagarro generated 34.9% of its revenue from North America (Q12025: 34.4%), 29.1% of its revenue from Central Europe (Q12025: 29.9%), 23.8% of its revenue from Rest of World (Q12025: 23.4%) and 12.2% of its revenue from Rest of Europe (Q12025: 12.3%). 

The combination would also significantly increase the Total Addressable Market (TAM) to over $1.4 billion, with a client portfolio that would include four of the Top 5 European automotive firms, seven of the Top 10 US and Indian banks, and 8 of the Top 15 healthcare and life sciences companies.