Indian IT Majors Go On A Buying Spree
Despite the slowdown in the overall world economic scenario, Indian IT companies are undeterred by the bleak business prospect. In fact they are using this as an opportunity to expand their overseas businesses. This became clear when Infosys, India’s second largest provider of IT enabled business services with an annual operating profit of around $1.25 billion announced its bid to acquire Axon Group of UK in an all-cash deal of $814 million.
According to analysts, Infosys is paying a premium of 33.1 percent to the average value during 6 last 6 months of Axon’s 67.85 million shares. The bid price is also 19.4 percent higher to the price the share was last traded on 22nd August.
There is no surprise in the bid as according to G. Gopalkrishnan, CEO of Infosys, the company is looking to leverage the Systems Application and Products (SAP) expertise that Axon offers.
“This strategic combinations of our groups will accelerate the realization of our common aspirations – that of becoming the most respected provider of business transformational services in the global market place.”
Said Mr. Gopalkrishnan. The board of Axon seems to have accepted the offer and recommended it. If everything goes by the book, the two companies are supposed to merge by November.
On the other hand, another IT major HCL technologies announced that it was acquiring Control Point Solutions, a US – based company offering voice, data and wireless telecommunications expense management services for $20.8 million. The takeover will give HCL a solid platform and a cutting-edge competitive advantage in the lucrative telecommunication expense management service. As Ranjit Narasimhan, president and CEO of BPO services, HCL technologies said –
“The strategic acquisition of Control Point Solutions is in line with HCL’s goal to make strategic, platform based acquisitions which give us sustainable competitive advantage in choosen vertical.”