The Hindu Business Line : `Infosys careful on acquisitions'

While inorganic growth has come to be an accepted strategy among the Indian companies not only in the IT sector but also in many other industries such as automobile and pharma, software major Infosys seeks to adopt a cautious approach towards acquisitions.

Responding to a question at the conference call of analysts after the publication of the third quarter results of the company, Mr Kris Gopalakrishnan, COO, President and Joint Managing Director, said the company is open to acquisitions.

The company would look at acquisitions to "fill up gaps in our services mix, to grow faster in a market where organic growth will be challenging, for example in a non-English speaking market like Germany, France, Japan etc.''

He said "in Europe we can look at an acquisition''. Infosys also looks at acquisitions for faster growth in a particular industry vertical or an entirely new vertical.

Mr Gopalakrishnan said that as integration is the biggest challenge, "making it work is the biggest challenge and the industry data shows that only maybe 15-20 per cent of acquisitions give the value or the benefit which was intended to be given and you derive benefit from that''.

Infosys is careful in selecting companies and in what it is willing to pay. It is careful about the ability to integrate.

He said there is need for a clear plan of integration, roles and responsibilities, especially if the overlap is significant. There are some challenges and that's why Infosys has been "very careful about acquisitions''.

The company has done one in Australia and smaller ones for its product group where it needs certain modules for filling the portfolio for the product.

Mr Gopalakrishnan said Infosys is open to acquisition at any point of time. It is in "discussions with some companies, some investment banks etc''.

Only if the talks fructify, it could talk about them or show that it has completed one more acquisition.

More Stories on : Mergers & Acquisitions | Software | Infosys Technologies Ltd

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