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Breakingviews: Cognizant of M&A froth

Monday, September 15, 2014 - 03:17

Breakingviews columnists discuss further signs of deal exuberance on another Merger Monday, including Cognizant's $2.7 bln acquisition of TriZetto.

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It's Monday its merger Monday and more evidence that exuberance and today. Animal spirits. -- looked at this cognizant of IT health care provider says hope to present openness to deal now. That can happen but traditionally on average it does so well why is. What what way is that exuberant on this case. It's unclear. Giving it -- the justification doesn't really seem to be much one. They say OK so. This business is great it's it's probably solutions and stuff and we're gonna have additional business additional revenue synergies and there was -- -- -- -- Investors are typically skeptical of these sorts of things as they say OK we'll believe it when we see because it's very easy to promise these things that -- it's relatively new telescopes because constantly but yet a different thing to say we can almost exactly and also the -- they -- felt they say for the long term it. Should be neutral to positive for the long term growth and margins. He suspected you're -- go through the risk of doing a big deal you wanna say. It's certainly going to be good for these sort of the backdrop of course has been met in over the past year. We've seen huge momentum towards -- stocks really gone abroad mean to your percent is you know it's maybe surprising pop music we've seen. Routinely 6710 and 12% history says that at least on it an average. To cut the deal deals that -- value for the acquire us the tools right exactly over the long term so and also during you know I'd be in the years before that. You know post crisis of a fighter window. Stocks which you know would go down from the buyers believe it was it was -- -- said that today he says and this happening if you says most bill that also deals closing quick of them. Before yes I've been in this this 2% pop I ever actually you know maybe a little bit of you know resistance. Maybe investors start to get a little bit worried we -- -- deals last week also. Similar kind of phenomenal alliance data right and Eastman Chemical doing deals where there was a small pot may be flat and so. There were some questions about about the -- I wonder if there's a little devote you know pull back from -- or -- it the other thing in this particular deal was the that this is it. So deadly business IT and mile end quote from this promise obscenities that was really nothing you can get your teeth into this press release that was loads of loads of words let -- a lot of -- The Angel is imminent if it's that if it is very difficult to understand exactly to what the companies are proposing to do and and the other thing of course is that if you can't say something clearly it's very difficult to do it you know if they said we're going to cut costs and save money but okay can get wrap your head around and figure Kenny or not. If they want him optimizing our business solutions and other things -- -- the ones that mean I don't know maybe they don't even believe it. And echoes a lot towards sort of of why we talk -- we were before the sense that a lot of the deals we've seen over the Lester have been very sort of you know bread and butter kind of -- rival -- a lot of caught. Looks easy to closing get it done and that's the kind of thing that investors are really did happen about it is it is -- something of a different we're getting into these -- -- -- deals that are maybe that's. Getting to the into the exuberance to. You know. All right we'll leave that thanks guys we'll double breaking views views more.

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Breakingviews: Cognizant of M&A froth

Monday, September 15, 2014 - 03:17