Persistent Systems (PERSISTENT) investor relations material

Deal rationale and strategic fit

• The merger creates a $2.9B+ AI-led digital engineering powerhouse with 46,000+ employees in 40+ countries, combining complementary capabilities, geographies, and verticals, and accelerating growth, especially in Europe and North America.

• The combination diversifies revenue across the US and Europe, strengthens AI, ERP, CX, and cloud capabilities, and positions the group to serve multi-region enterprise clients.

• Both companies share a strong engineering-first culture, entrepreneurial spirit, and complementary domain expertise, easing integration and aligning on growth ambitions.

• The combined entity will be the second-largest digital engineering player globally and seventh-largest India-listed tech services company.

• The deal enables entry into new markets and verticals, including industrial, consumer, and public sector, and strengthens ERP and AI capabilities.

Financial terms and conditions

• Persistent will acquire 100% of Nagarro at an enterprise value of €1.27B (~$2.9B), offering €81/share in cash, a 140% premium to the undisturbed closing price on June 25, 2026.

• The offer values Nagarro at 1.27x EV/revenue and 9.12x EV/EBITDA (TTM Mar-26), with a minimum acceptance threshold of 50%+1 share.

• The transaction is fully funded by a €1.4B committed bridge facility from Barclays, with leverage expected to reduce to below 1x by FY2030.

• Persistent has secured a binding agreement to acquire the largest shareholder’s 21% stake at the offer price.

• The deal is expected to be cash and reported EPS accretive from year one, excluding transaction expenses.

Synergies and expected cost savings

• Revenue and cost synergies will be detailed post-regulatory approvals; initial focus is on growth-related initiatives rather than cost-cutting.

• Significant cross-selling opportunities exist due to minimal customer overlap and complementary service lines.

• The merger expands the total addressable market to over $1.4 trillion and accelerates AI-led transformation.

• Management expects to maintain or improve margins, leveraging operational rigor and best practices.

• Enhanced growth prospects and broader career opportunities for employees.