Infosys opens M&A account

Software major buys Australian firm for $23 million

In its first major acquisition, Infosys Technologies has bought a 100 per cent stake in Australia-based Expert Information Services Pty Ltd for approximately A$31 million ($22.9 million). The Australian company will be renamed Infosys Technologies (Australia) Pty Ltd.

As per the agreement signed between the two companies, Infosys will make an upfront payment of A$19 million into an escrow account, while the remaining A$12 million will be payable over three years ending March 31, 2007, based on achieving certain financial targets and retaining key employees. The transaction cost is estimated to be A$1 million.

Founded in 1994, Expert is one of Australia's leading infotech service providers specialising in the design, building and integration of business solutions.

The company is headed by Gary Ebeyan, who will head Infosys' Australian operations post acquisition. For the year ended June 30, 2003, the company earned a revenue of $34.6 million with a net profit of $5.2 million.

 

Going global: India Inc is casting its net wide
Acquirer	Target company	Country	Activity of target company
Marico Industries	Sundari Llc	UK	Ayurvedic skin care
Indian Rayon	Dashiqiao Chemical	China	Carbon black
Wipro	Nervewire Inc	USA	IT Consulting
Sterlite Industries	Konkola Copper Mines Plc	Zambia	Copper
Patni Computer	The Refernce Inc.	USA	Misc. services
Dabur India	Redrock	UAE	Cosmetics & healthcare
Dabur India	Weikfield Intl	UAE	Cosmetics & food products
Wockhardt	CP Pharmaceuticals	UK	Drugs & pharma
VSNL	Gemplex	USA	IT services
Asian Paints	Taubmans Paints	Fiji	Paints & varnishes
Hindalco	Mount Gordon Copper Mines	Australia	Copper cathodes
Crisil	EconoMatters	UK	Gas consulting
Bharat Forge	Carl Dan Peddinghaus	Germany	Forging & casting
Sundaram Fasteners	Dana Spicer	UK	Forging & casting
Ranbaxy	RPG Aventis SA	France	Generic drugs
Indicative list		Source: CMIE

 

"Ever since we were listed on the Nasdaq in 1999, and till the recent American Depository Receipt (ADR) issue, we have maintained that we will use the capital for possible acquisitions. We were looking for a company whose values were similar to those of Infosys. We have seen these qualities in Expert," Infosys Chairman and Chief Mentor N R Narayana Murthy said. Expert's board of directors will be reconstituted after the transaction to comprise six directors nominated by Infosys and two by Expert. "The merger with Infosys is a perfect fit with Expert's business strategy. The new entity will allow us to continue delivering high-quality, leading-edge solutions to our existing and new customers with an extraordinary value proposition based on the global delivery model of Infosys," Ebeyan said. Expert has 330 employees and hopes to "revolutionise" its work for the Australian market post acquisition. The net worth of Expert is A$6.2 million. Telecom contributes 74 per cent of its revenue, and this domain is expected to give a fillip to Infosys' operations in Australia. Finance and retail contribute 9 per cent and 4 per cent of Expert's revenue, respectively. The company boasts of a low attrition rate of 4.8 per cent, compared with Australia's industry average of 8.6 per cent.