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THE FIRST BUY: Mr N.R. Narayana Murthy, Chief Mentor and Chairman, Infosys, and Mr Nandan Nilekani, CEO, at a press conference in Bangalore on Thursday. - G.R.N. Somashekar

Bangalore , Dec. 18

SOFTWARE bellwether Infosys Technologies Ltd finally announced its much-awaited maiden buy-out, four-and-half years after it listed on the Nasdaq to raise funds for such acquisitions and sifting through 135 companies for the right match.

The company said it has signed a pact to acquire 100 per cent equity in the privately held Australian IT service provider, Expert Information Services Pty Ltd, for close to Australian $31 million (approx. Rs 104.53 crore/$22.9 million) subject to standard closing conditions.

The transaction will be completed by January 2004. Infosys would make an upfront payment and escrow of A$19 million, and A$12 million as earn-out and transaction bonus is payable over three financial years starting fiscal 2005 for achieving certain financial targets and to retain key employees.

Expert Information, which services 40 clients, reported a net profit of A$7 million over revenue of A$46.7 million for its fiscal ending June 30, 2003. The company, which employs 330 people including 40 support staff, has a gross margin of 32.5 per cent and net margin of 15 per cent for the last fiscal. All Expert Information employees will be absorbed by Infosys under a new company, Infosys Technologies (Australia) Pty Ltd.

"Infosys will not let go these people," the Chief Mentor and Chairman, Mr N.R. Narayana Murthy, said.

The new employees would "more than double" Infosys' non-Indian staff on the rolls and "friction to business will be much lower," he added.

The acquisition "enables us to expand operations in Australia and increase management strength," the Chief Executive Officer, Mr Nandan Nilekani, said.

The new buy-out would help Infosys report a "quantum jump in terms of revenue" by 3.5-4 times in Australian market, where Infosys reported business close to $4.59 million in the first half of the current fiscal.

Expert Information specialises in design, building and integration of business solutions and products and derives close to 74 per cent of its revenues from telecom clients, 9 per cent from finance clients, 4 per cent from retail, 2 per cent from government and the remaining 11 per cent from others.

There are some common clients between Infosys and Expert Information such as telecom major Telstra.

The market failed to draw cheer from the buy-out news and Infosys stocks stayed tepid as many had anticipated a bigger acquisition.

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