Infosys May Spend $500M on Europe Deal
which sits on the largest cash pile among India’s computer-services providers, is prepared to spend as much as $500 million on a single acquisition in a European market.
Infosys may make another attempt to acquire a company of that size after it walked away from a plan to buy U.K.-based Axon Group Plc for 407 million pounds ($645 million) in 2008, Chandrashekar Kakal, the company’s global head of business IT services, said in a telephone interview.
“We do have cash, but we are looking for a company which adds to our capability and becomes complementary to our growth rather than becoming a laggard,” he said.
Infosys’s war chest of about $4 billion is more than twice the size that of Tata Consultancy Services Ltd. (TCS) Indian software companies, after a decade of growth fuelled by the outsourcing of jobs from the U.S., are turning to acquisitions to expand into Europe, now the second-largest source of their revenues. Making purchases in Europe may help Bangalore-based Infosys achieve a target of getting 40 percent of its sales from the region, up from about 22 percent.
In 2008, Infosys decided against further pursuing a plan to buy Axon after its bid was trumped by New Delhi-based HCL Technologies Ltd. In 2006, Infosys spent $115 million to purchase Citigroup Inc.’s stake in Progeon Ltd., a back-office service provider controlled by Infosys.
Bidding Competition
The company may also make a number of smaller purchases worth about $30 million to $50 million each, Kakal said in the interview on April 13, adding that such companies would be easier to integrate. He declined to identify potential targets or specify sectors where acquisitions may be made.
Infosys, which designs and builds software programs and provides back-office support to clients including U.K. phone company BT Group Plc (BT/) and oil company BP Plc, was founded by seven engineers in 1981 with $250 they borrowed from their wives.
Kakal, who joined the company in 1999, oversees Infosys’s development, maintenance, testing and infrastructure management services with about 60,000 employees, according to the company’s website.
Infosys may make another attempt to acquire a company of that size after it walked away from a plan to buy U.K.-based Axon Group Plc for 407 million pounds ($645 million) in 2008, Chandrashekar Kakal, the company’s global head of business IT services, said in a telephone interview.
“We do have cash, but we are looking for a company which adds to our capability and becomes complementary to our growth rather than becoming a laggard,” he said.
Infosys’s war chest of about $4 billion is more than twice the size that of Tata Consultancy Services Ltd. (TCS) Indian software companies, after a decade of growth fuelled by the outsourcing of jobs from the U.S., are turning to acquisitions to expand into Europe, now the second-largest source of their revenues. Making purchases in Europe may help Bangalore-based Infosys achieve a target of getting 40 percent of its sales from the region, up from about 22 percent.
In 2008, Infosys decided against further pursuing a plan to buy Axon after its bid was trumped by New Delhi-based HCL Technologies Ltd. In 2006, Infosys spent $115 million to purchase Citigroup Inc.’s stake in Progeon Ltd., a back-office service provider controlled by Infosys.
Bidding Competition
The company may also make a number of smaller purchases worth about $30 million to $50 million each, Kakal said in the interview on April 13, adding that such companies would be easier to integrate. He declined to identify potential targets or specify sectors where acquisitions may be made.
Infosys, which designs and builds software programs and provides back-office support to clients including U.K. phone company BT Group Plc (BT/) and oil company BP Plc, was founded by seven engineers in 1981 with $250 they borrowed from their wives.
Kakal, who joined the company in 1999, oversees Infosys’s development, maintenance, testing and infrastructure management services with about 60,000 employees, according to the company’s website.
