T major Infosys Technologies on Monday announced plans to acquire UK SAP consulting company Axon Group plc for Rs 3,310 crore (around $753 million). The deal, which would be closed in November, involved a total cash buyout of issued—and yet to be issued—shares of Axon by Infosys.
Addressing the media, Infosys CEO Kris Gopalakrishnan said, "The strategic combination of our groups will accelerate the realisation of our company aspiration: that of becoming the most respected provider of business transformational services in the global marketplace." It is one of the largest acquisitions by an Indian company in this sector.
The acquisition is also significant, coming as it does in an environment seen as increasingly challenging, particularly for IT companies. In 2003, Infosys acquired Australia's Expert Information Services Pty Ltd, later rechristened Infosys Australia, for $22.9 million. More recently, in 2007, it acquired three captive BPO units of Philips of the Netherlands for close to $250 million.
The latest acquisition is expected to offer the companies a platform to cross-sell services and would facilitate "a process of leveraging domain capabilities across a range of industry verticals," the company said.
Infosys said that the deal was set at a price of £6 a share, including interim dividends declared by the board of the company, a 19.4% premium on the closing price of £5.02 on August 22.
Listed on the LSE, Axon Group employs 2,000 professionals. It reported a profit after tax for the year ended December 2007 of £20.2 million and revenues of £204.5 million. Founded in 1994, it offers SAP consultancy services to multinationals, Infosys said.
Infosys' revenues from consulting and packaged implementation business contributed 23.8% to its overall revenues in fiscal 2008, growing 52.4% annually. Infosys said the acquisition of Axon would strengthen its SAP services' portfolio and enable the "enlarged group to participate in large SAP related deals
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