Pune-headquartered Persistent Systems has built a 94 percent stake in German software engineering provider Nagarro, clearing the legal threshold necessary to initiate a squeeze-out of minority equity holders. This development resolves primary uncertainties surrounding the transaction initially revealed in June. By moving past the 90 percent ownership level under German statutes, the Indian firm can mandate the sale of remaining shares and fold the acquired business into its German unit, delisting it from the Frankfurt bourse.
The buyout process unfolded across distinct stages following an offer priced at €81 per share. By 17 September, Persistent secured 83 percent ownership before a follow-on tender pushed the holding to 94 percent. Total capital deployed for these transactions reached around $1.1 billion. This disbursement comprised $824 million allocated toward tendered equity alongside $253 million directed to purchase a stake previously owned by Lantano.
Persistent arranged debt to finance the cross-border transaction rather than relying entirely on its own reserves. In December 2025, Galaxy Germany Holding SE, a wholly owned German subsidiary established by Persistent, secured a credit facility of up to €1.4 billion, or $1.6 billion, from Barclays. This exceeded the $1.3 billion baseline tied to the original transaction expectation. Terms attached to the Barclays loan dictate full repayment inside an 18-month duration.
The acquisition elevates Persistent to the seventh-largest technology services player in India. Consolidating Nagarro will create an entity generating at least $2.7 billion in turnover. Persistent closed the prior year with $1.65 billion in revenue following a 17.4 percent increase, placing it second in domestic IT expansion pace behind Coforge Ltd, which posted 29 percent growth. Nagarro contributed $999 million in revenue over its recent fiscal period with an operational headcount of roughly 18,500 people.
Geographic diversification represents a major corporate objective for the combination. European clients supply close to half of Nagarro's top line. Following the consolidation, Persistent projects its total European revenue share will climb from one-tenth to one-fifth of corporate billings, assisting domestic IT providers currently deploying capital acquisitions to counterbalance revenue slowdowns connected to artificial intelligence trends.
Company management plans to conclude the entire transaction by March next year. However, institutional observers have highlighted potential risks. Brokerage analysts at Kotak Institutional Equities indicated that passing the 90 percent barrier eases integration friction, noting the deal combines debt and equity funding. Meanwhile, Bank of Baroda Capital Markets analysts cautioned that major acquisitions by mid-tier firms like Persistent and Coforge risk reducing return ratios, create integration complexities, and lean on share dilution.
With the release on 9 October confirming that the equity condition was met, Persistent noted that while a buyout of minority investors is planned upon closing, formal determinations remain pending. Corporate leadership will subsequently concentrate on concluding operational steps, managing post-deal execution, and retiring the bank facility.
Key numbers
- Persistent ownership in Nagarro: 94%
- Tender offer price per share: €81
- Barclays loan facility: up to €1.4 billion
- Combined entity expected revenue: at least $2.7 billion
- Nagarro workforce: about 18,500 employees
What a board might note
- How will the treasury team structure liquidity to extinguish the Barclays loan facility of up to €1.4 billion within the required 18-month repayment window?
- Does the board have a dedicated integration plan ready ahead of the March completion deadline to extract value from Nagarro's 18,500 staff across Europe?
- How will finance leaders address the analyst concerns regarding return dilution and potential share issuance cited by Bank of Baroda Capital Markets on 9 October?
Source: Mint, 10 October 2026. This is a summary of a news report, published as general information. It is not legal, tax or investment advice.
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