IT firms acquire niche players in ER& D to generate new revenue streams

Information technology (IT) services companies are increasingly acquiring niche players, mostly in engineering research & development (ER&D), as it is a high-growth sector offering opportunities to generate new revenue streams.

Cognizant’s acquisition of Belcan for $1.3 billion earlier this week, as well as Infosys’ dual acquisitions of in-tech for $480 million and InSemi for $34 million earlier this year, are clear indicators of this trend.