The Hindu Business Line : Infosys eyeing buyouts in Europe

To boost presence
Infosys is in talks with 2-3 companies; to acquire capability, people in the region through the acquisitions.
Its last major acquisition was Australian software firm Expert Information Service in December 2003.

Growth push: A file photo of Mr Kris Gopalakrishnan, CEO and Managing Director of Infosys

Shamik Paul

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Bangalore, May 23 Infosys Technologies Ltd, the country’s second largest IT service provider, said it is actively looking for acquisitions in Europe to increase its presence in the European markets.

This is significant given that the industry is abuzz with acquisitions and the last major acquisition by the company was the Australian software firm Expert Information Service in December 2003 for about $22.9 million, its first overseas acquisition.

Mr S. Gopalakrishnan, Chief Executive Officer and Managing Director, told Business Line, “Infosys has two to three companies on its list. We are in discussions with these companies.”

Mr Gopalakrishnan declined to give further details and said until Infosys closes the deals he could not give further information. He said Infosys has been active in this regard, and would buy when it finds the right company.

He said the company is expecting to grow faster in Germany, France and Switzerland – markets where local language support is required.

The focus is to acquire capability and people through these acquisitions, he added.

In the fourth quarter of fiscal 2008, Europe contributed 29.3 per cent of total revenue, compared with 26.6 per cent in the year-ago quarter.

Mr Navi Radjou, Vice-President, Forrester Research Inc, had recently told Business Line that the Indian companies would be buying boutique consulting firms in Europe to grow in the European markets.

Mr Navi had also said the Indian IT service providers would lose deals to the MNCs such as Accenture and IBM because they fail to provide a growth strategy to their clients.

Mr Gopalakrishnan said it is true that the Indian IT service providers largely work with the Chief Information Officers of a company, helping the company reduce cost.

But he added that some of Infosys’ projects are to do with growth as well, helping the clients increase sales . According to him, there has to be a combination in this regard. “Infosys works on some projects that are focused on reducing costs for clients, while others are focused on growing their revenue.”

In the fourth quarter of fiscal 2008, revenue from consulting services and package implementation was 24.1 per cent of total revenue, compared with 22.7 in the year-ago quarter.