NEW YORK (TheStreet) -- Shares of Cognizant Technology Solutions Corp. (CTSH) are higher by 2.48% to $45.87 in pre-market trading on Monday, after the company announced it has agreed to purchase the privately held TriZetto Corp. for $2.7 billion in cash.
Cognizant Technology, a provider of custom information technology, consulting and business process outsourcing services, said it expects the acquisition to "accelerate significantly its market position and strategy of delivering innovative healthcare software and solutions to a wide range of healthcare clients."
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"The transaction is expected to be immediately accretive to Cognizant's non-GAAP EPS, excluding one-time transaction costs and adjustments. That earnings benefit is expected to increase over time as we realize significant revenue synergy potential from the combination of these businesses" company CFO Karen McLoughlin said.
The deal is expected to close in the 2014 fourth quarter.
Separately, TheStreet Ratings team rates COGNIZANT TECH SOLUTIONS as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate COGNIZANT TECH SOLUTIONS (CTSH) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."