Persistent's Nagarro deal could be a near-term pain for long-term gain

Persistent Systems is acquiring Nagarro at an enterprise value of around $1.3 billion (about Rs 13,540 crore), funded through fresh debt of around $1.4 billion from Barclays at 4.1-4.8% effective interest, repayable in 18-24 months. The deal values Nagarro at 1.3x revenue and 9x EBITDA, with Persistent paying nearly double Nagarro's three-month average share price as a control premium, given Nagarro's stock has halved from its December 2025 peak of 80.4. The combined entity is expected to generate around $2.9 billion in revenue, making it the seventh-largest Indian IT company, while expanding Persistent's European revenue share to around 22% from 9%; deal is likely to close by the March 2027 quarter.