EPAM Announces Agreement to Acquire NEORIS

Rhea-AI Summary

EPAM Systems, Inc. (NYSE: EPAM) has announced an agreement to acquire NEORIS, a global advanced technology consultancy. This acquisition will expand EPAM's delivery capabilities in Latin America and Europe and increase client value across key industries. NEORIS, headquartered in Miami, has over 4,700 professionals across major talent hubs in Latin America, Spain, and the U.S.

The acquisition is expected to strengthen EPAM's presence in LATAM and enhance its delivery capabilities across Europe, India, and APAC. It will create a market offering for clients across Latin America and in Spanish- and Portuguese-speaking markets. The deal is subject to customary closing conditions and is expected to close in the fourth quarter of 2024.

Positive

• Expansion of EPAM's delivery capabilities in Latin America and Europe
• Addition of 4,700 professionals to EPAM's workforce
• Enhancement of EPAM's presence in LATAM and Spanish/Portuguese-speaking markets
• Broadening of global and nearshore delivery capabilities across North America and Europe
• Potential for increased client value across key industries

Negative

• None.

Insights

Financial Analyst

EPAM's acquisition of NEORIS marks a strategic expansion into Latin American and European markets, potentially boosting its global competitiveness. The deal adds 4,700 professionals to EPAM's workforce, significantly enhancing its delivery capabilities in key regions. This move aligns with the industry trend of IT service providers expanding their nearshore capabilities to meet client demands for cost-effective, timezone-friendly solutions.

While financial terms weren't disclosed, the acquisition's impact on EPAM's revenue and profitability will be important to monitor. Investors should watch for potential synergies in cross-selling opportunities and operational efficiencies. The deal's closing in Q4 2024 suggests a long-term growth strategy, but integration challenges and costs could affect short-term performance.

Tech Expert

NEORIS brings valuable expertise in Digital Experience, Engineering, SAP, Data, Analytics, ML & AI, complementing EPAM's existing capabilities. This acquisition positions EPAM to better compete in the digital transformation space, particularly in Spanish- and Portuguese-speaking markets. The combined entity will likely have a stronger offering in emerging technologies, potentially accelerating innovation for clients across various industries.

The integration of NEORIS' talent pool could lead to knowledge transfer and enhanced service offerings. However, the challenge lies in seamlessly merging different corporate cultures and technology stacks. Investors should monitor how effectively EPAM leverages NEORIS' expertise to drive growth in key sectors like Manufacturing, Banking and Retail.

Market Research Analyst

This acquisition reflects the growing importance of Latin America in the global IT services market. EPAM's move to strengthen its presence in this region could yield significant long-term benefits, given the area's increasing digital adoption and economic growth potential. The deal also enhances EPAM's nearshore capabilities, which is important for serving North American clients efficiently.

Investors should consider the competitive landscape in Latin America and how this acquisition positions EPAM against other global IT service providers. The continued partnership with Cemex suggests potential for industry-specific innovations in construction and materials, which could open new revenue streams. However, the success of this acquisition will largely depend on EPAM's ability to integrate and leverage NEORIS' client relationships and regional expertise effectively.

The acquisition will expand EPAM's delivery capabilities in Latin America and Europe and increase client value across key industries

NEWTOWN, Pa. and MIAMI, Sept. 4, 2024 /PRNewswire/ -- EPAM Systems, Inc. (NYSE: EPAM), a leading digital transformation services and product engineering company, announced today that it has entered into an agreement to acquire NEORIS, a Miami-headquartered global advanced technology consultancy with more than 4,700 professionals across major talent hubs in Latin America, Spain and the U.S. The sellers are funds managed by Advent International, one of the largest and most experienced global private equity investors, and Cemex, a global construction materials company.

NEORIS specializes in delivering complex digital engagement and transformation projects for clients in the Americas and Europe, across various industries, such as Manufacturing, Banking, CPG & Retail, Telco & Media, among others. They utilize their strong software development and technology consulting expertise in multiple domains, including Digital Experience, Engineering, SAP, Data, Analytics, ML & AI, Interactive UX, Digital Strategy and Enterprise Architecture.

"NEORIS' commitment to engineering quality, innovation, and strong level of client engagement, combined with their deep expertise across our key industry segments, makes them the best partner for us," said Arkadiy Dobkin, CEO & President at EPAM. "This combination will significantly strengthen our presence in LATAM while we continue to enhance our differentiated delivery capabilities across Europe, India and APAC."

The addition of NEORIS will create a market offering for clients across Latin America and in Spanish- and Portuguese-speaking markets, while broadening EPAM's global and nearshore delivery capabilities across North America and Europe.

"We are thrilled about the opportunities this acquisition brings. Partnering with EPAM allows us to lead the global digital transformation wave while continuing to deliver exceptional technology solutions to our clients," said Martin Mendez, CEO of NEORIS. "Together, we will accelerate technology and business transformation solutions for our now even more diversified client portfolio."

"Cemex founded NEORIS more than 20 years ago and led it to become a global leader in technology consultancy," said Fernando Gonzalez, CEO of Cemex. "We are proud of its track record and the role it has played in Cemex becoming an industry pioneer in digital technologies. We look forward to continuing our collaboration with the newly combined team. This transaction is part of Cemex 's efforts to focus on its core businesses and aligns with our ongoing acquisitions and portfolio rebalancing strategy."

NEORIS and Cemex expect to continue partnering to further Cemex's leadership in providing a superior customer experience through digital technologies.

Advent has significant experience and knowledge in the Business Services industry, having invested in 90 companies worldwide. This investment marked Advent's fifth in the IT services space.

To learn about career opportunities at EPAM, visit www.epam.com/careers. 

Details Regarding Proposed Acquisition of NEORIS
The acquisition is subject to customary closing conditions, including the receipt of necessary regulatory clearances, and is expected to close in the fourth quarter of 2024. Orrick is serving as legal advisor to EPAM and Simpson Thacher & Bartlett; Creel, García-Cuéllar, Aiza y Enríquez; Martínez, Quintero, Mendoza, Gonzáles, Laguado, & De la Rosa; DLA Piper; Freshfields Bruckhaus Deringer; and Pérez-Llorca are serving as legal advisors to NEORIS and its shareholders, and Canaccord Genuity is serving as its financial advisor.

About EPAM Systems
Since 1993, EPAM Systems, Inc. (NYSE: EPAM) has used its software engineering expertise to become a leading global provider of digital engineering, cloud and AI-enabled transformation services, and a leading business and experience consulting partner for global enterprises and ambitious startups. We address our clients' transformation challenges by focusing EPAM Continuum's integrated strategy, experience and technology consulting with our 30+ years of engineering execution to speed our clients' time to market and drive greater value from their innovations and digital investments.

We make GenAI real with our AI LLM orchestration, testing and engineering solutions, EPAM DIAL, EPAM EliteA^™ and EPAM AI/RUN^™, respectively.

We deliver globally but engage locally with our expert teams of consultants, architects, designers and engineers, making the future real for our clients, our partners, and our people around the world. We believe the right solutions are the ones that improve people's lives and fuel competitive advantage for our clients across diverse industries. Our thinking comes to life in the experiences, products and platforms we design and bring to market.

Added to the S&P 500 and the Forbes Global 2000 in 2021 and recognized by Glassdoor and Newsweek as a Top 100 Best Workplace, our multidisciplinary teams serve customers across six continents. We are proud to be among the top 15 companies in Information Technology Services in the Fortune 1000 and to be recognized as a leader in the IDC MarketScapes for Worldwide Experience Build Services, Worldwide Experience Design Services and Worldwide Software Engineering Services as well as a leader in the 2024 Gartner® Magic Quadrant™ for Custom Software Development Services, Worldwide.*
Learn more at www.epam.com and follow us on LinkedIn.

* Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

About NEORIS
NEORIS is a leading global digital accelerator, with more than 20 years of experience, which helps companies and organizations around the world to take the leap towards innovation, through the design and implementation of disruptive and sustainable solutions so that they can develop their activities in a more efficient and a competitive way.

Headquartered in Miami, Florida, NEORIS has operations in the US, Europe and Latin America and has more than 400 active clients. It is the first and only IT consulting company in Latin America that received the SAP® global services certification and among its global partners it counts industry majors such as Microsoft, Amazon Web Services, Oracle and Salesforce.
To learn more, visit www.neoris.com or LinkedIn.

About Cemex
Cemex is a global construction materials company that is building a better future through sustainable products and solutions. Cemex is committed to achieving carbon neutrality through relentless innovation and industry-leading research and development. Cemex is at the forefront of the circular economy in the construction value chain and is pioneering ways to increase the use of waste and residues as alternative raw materials and fuels in its operations with the help of new technologies. Cemex offers cement, ready-mix concrete, aggregates, and urbanization solutions in growing markets around the world, powered by a multinational workforce focused on providing a superior customer experience enabled by digital technologies. For more information, please visit: www.Cemex.com.

About Advent
Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in 420 private equity investments across 43 countries, and as of December 31, 2023, had $94 billion in assets under management*. With 15 offices in 12 countries, Advent has established a globally integrated team of over 300 private equity investment professionals across North America, Europe, Latin America, and Asia. The firm focuses on investments in five core sectors, including business and financial services; health care; industrial; retail, consumer, and leisure; and technology. For 40 years, Advent has been dedicated to international investing and remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies.

For more information, visit
Website: www.adventinternational.com
LinkedIn: www.linkedin.com/company/advent-international

*Assets under management include assets attributable to Advent advisory clients as well as employee and third-party co-investment vehicles.

Forward-Looking Statement
This press release includes certain statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Such forward-looking statements are mainly based on our current expectations and estimates of future events and trends, which affect or may affect our business and operations. These statements may include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. Those future events and trends may relate to, among other things, the closing of the Acquisition, which may not close on the terms or timing anticipated, or at all, the satisfaction or waiver of any conditions to the closing of the Acquisition, the anticipated impacts or benefits of the Acquisition, developments relating to the war in Ukraine and escalation of the war in the surrounding region, political and civil unrest or military action in the geographies where we conduct business and operate, difficult conditions in global capital markets, foreign exchange markets and the broader economy, and the effect that these events may have on client demand and our revenues, operations, access to capital, and profitability. Other factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, the risk factors discussed in our most recent Annual Report on Form 10-K and the factors discussed in our Quarterly Reports on Form 10-Q, particularly under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" and other filings with the Securities and Exchange Commission. Although we believe that these forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made based on information currently available to us. EPAM undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

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SOURCE EPAM Systems, Inc.

FAQ

What is the strategic importance of EPAM's acquisition of NEORIS?

The acquisition of NEORIS will expand EPAM's delivery capabilities in Latin America and Europe, strengthen its presence in LATAM, and enhance its ability to serve Spanish and Portuguese-speaking markets. It will also broaden EPAM's global and nearshore delivery capabilities across North America and Europe.

How many professionals will EPAM gain through the NEORIS acquisition?

EPAM will gain over 4,700 professionals across major talent hubs in Latin America, Spain, and the U.S. through the acquisition of NEORIS.

When is the EPAM-NEORIS acquisition expected to close?

The acquisition is expected to close in the fourth quarter of 2024, subject to customary closing conditions and necessary regulatory clearances.

What industries does NEORIS specialize in?

NEORIS specializes in delivering complex digital engagement and transformation projects for clients in various industries, including Manufacturing, Banking, CPG & Retail, and Telco & Media, among others.

How will the NEORIS acquisition affect EPAM's stock (NYSE: EPAM)?

While the specific impact on EPAM's stock is not mentioned, the acquisition is expected to strengthen EPAM's market position and delivery capabilities, which could potentially have a positive effect on the company's performance and stock value.