NEWTOWN, Pa. - EPAM Systems, Inc. (NYSE: EPAM), a prominent player in digital transformation services and product engineering, has finalized the purchase of NEORIS, a global technology consultancy firm. The acquisition, which closed today, is seen as a strategic move to enhance EPAM's delivery capabilities in Latin America and Europe, aiming to provide increased value to clients across various industries.
NEORIS, headquartered in Miami, boasts a professional workforce of approximately 4,800 across major talent hubs in Latin America, Spain, and the U.S. The company is known for tackling complex digital engagement and transformation projects, with expertise spanning Digital Experience, Engineering, SAP, Data, Analytics, Machine Learning & Artificial Intelligence, Interactive UX, Digital Strategy, and Enterprise Architecture.
The acquisition is expected to strengthen EPAM's competitive offerings, particularly in Latin American markets and Spanish- and Portuguese-speaking countries, while also expanding its global and nearshore delivery capabilities. This includes reinforcing its presence in North America, India, and Europe.
EPAM Systems has established itself as a global provider of digital engineering, cloud, and AI-enabled transformation services since its inception in 1993. The company has been recognized for its multidisciplinary teams serving clients across six continents and has been added to the S&P 500 and the Forbes Global 2000 in 2021.
The financial terms of the acquisition have not been disclosed. The sellers include funds managed by Advent International, a leading global private equity investor, and Cemex, a global building materials company.
This strategic acquisition is part of EPAM's continued growth trajectory and commitment to enhancing its service offerings and geographical reach. The information regarding this acquisition is based on a press release statement issued by EPAM Systems, Inc.
In other recent news, EPAM Systems has been actively expanding its operations through strategic acquisitions. The company recently acquired First Derivative and NEORIS, moves that are expected to contribute significantly to the company's annualized revenue growth, according to TD Cowen and Mizuho Securities. Despite potential integration challenges and concerns about the lower margin profile of First Derivative's diversified services, Piper Sandler has maintained its Overweight rating on EPAM Systems.
The company's third-quarter earnings release is highly anticipated, with Piper Sandler emphasizing the importance of management's commentary on strategic aspects such as mergers and acquisitions, geographical expansion, and the company's overall growth strategy. Piper Sandler, Mizuho Securities, and TD Cowen have all provided recent analyst notes on EPAM Systems, offering various ratings and price targets.
EPAM Systems reported a decrease in its 2024 organic CC revenue forecast, leading to Mizuho Securities lowering its stock price target. Despite this, Mizuho continues to maintain an Outperform rating, indicating a positive future for the company. These are some of the recent developments for EPAM Systems, providing investors with valuable insights into the company's performance and strategic direction.
InvestingPro Insights
EPAM Systems' acquisition of NEORIS aligns with the company's strong financial position and growth strategy. According to InvestingPro data, EPAM boasts a market capitalization of $10.76 billion and maintains a healthy balance sheet, with more cash than debt. This financial stability likely facilitated the strategic acquisition to expand its global footprint and service offerings.
Despite recent market challenges, with a year-to-date price return of -36.55%, EPAM's fundamentals remain solid. The company's P/E ratio of 26.74 suggests that investors still value its growth potential, which could be further enhanced by the NEORIS acquisition. Additionally, EPAM's revenue for the last twelve months stands at $4.62 billion, indicating a substantial operational scale that can support integration efforts and potential synergies with NEORIS.
InvestingPro Tips highlight EPAM's financial prudence and growth prospects. The company has been aggressively buying back shares, signaling confidence in its value proposition. Moreover, analysts predict profitability for the current year, with 5 analysts revising their earnings estimates upward for the upcoming period. These factors suggest that EPAM is well-positioned to leverage the NEORIS acquisition for future growth.
For investors seeking a deeper understanding of EPAM's potential, InvestingPro offers 8 additional tips, providing a comprehensive view of the company's financial health and market position.
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