The Hindu Business Line : Infosys eyeing acquisitions in consulting, ERP space

New Delhi, Jan. 13 Infosys Technologies on Tuesday said it is looking to acquire companies in areas such as consulting and ERP. The buyout could entail firms with revenue up to $1 billion, a senior Infosys official said.

“The driver for us is finding an acquisition opportunity, it is important for us to do that. If we find a company with the right valuation in the areas of consulting, transformation capabilities or ERP, we will go ahead,” Mr S.D. Shibulal, COO and Board Member of Infosys Technologies, told Business Line.

He said that geographic penetration could be yet another driver for acquisition moves by the Bangalore-based company. “Within Europe, it makes sense to go for acquisition for cultural knowledge…It could be in continental Europe.” It may be recalled that Infosys had bowed out of the race to acquire UK consulting firm Axon Group after HCL Technologies made a trumping offer. HCL Tech recently completed the Axon buyout.

Cash in hand

As on December 31, 2008, Infosys had $1.9 billion in cash and cash equivalents including cash and bank deposits, and deposits with corporations.

He said while the clients were expected to finalise their budget for FY10 during February or March 2009, the feelers so far that the company had received from customers pointed to a “flat to marginally lower” budget. “The budgets are not going to be etched in stone this time. This means that if the environment is uncertain, even if the Budgets are closed, companies will look to cut them. Similarly, in case the environment improves, there might be a reversal of the situation,” he said.

Asked if the company had been approached by any client of Satyam for taking on its work, he replied in the affirmative. “It is in the initial stages. We have told them that there is a formal proposal process to be adhered to,” he said.

On measures that Infosys was taking to restore client confidence in the aftermath of the disclosures by Satyam, he said, “Our disclosures are governed by the listing agreements, norms and regulations. We are already compliant with listing agreement under SEC and SEBI. However, this time as a response to the current situation, we have made additional disclosures including the list of our bank accounts. ”