UBS Sells Back Office Provider to Cognizant

TEANECK, N.J. (TheStreet) -- Consulting and outsourcing specialist Cognizant(CTSH Quote) has snapped up UBS'(UBS Quote) back office provider in an attempt to boost its banking and financial services business.

Cognizant, which competes with Wipro(WIT Quote) and Infosys(INFY Quote), is buying the UBS India Service Center (ISC) in a $75 million all-cash deal. The ISC, which is based in Hyderabad, employs 2,000 people and serves all UBS global business groups. Cognizant expects to conclude the transaction in December.

"This acquisition builds on our long-standing strategy of delivering sharply-focused business solutions and enhanced value to our clients in financial services and capital markets industries," said Francisco D'Souza, the Cognizant CEO, in a statement.

As part of the deal, Cognizant has also clinched a 5-year agreement to provide outsourcing, IT, and remote infrastructure management services to UBS. The pact is worth $442 million to Cognizant, according to a filing made with the SEC early Thursday.

The UBS deal comes at a time when Cognizant is eyeing post-recession growth opportunities. Cognizant posted revenue of $776.6 million during its recent second quarter, up 13% on the same period last year, and 4% sequentially. The company also raised its revenue guidance for fiscal 2009.

Cognizant's stock rose 7 cents, or 0.18%, to $39.74 Thursday, reversing the slight decline in tech stocks that saw the Nasdaq slip 0.35%. UBS shares dipped 12 cents, or 0.63%, to $18.86.

-- Reported by James Rogers in New York