Infosys to buy Philips Global's finance BPO

IT major Infosys Technologies is set to acquire Philips Global's finance and accounts BPO for an assured revenue of $200 million spread over five years.

Infosys will be taking over the subsidiary along with all the costs in the similar manner that TCS had acquired the operations of the Pearl Group in the UK.

According to informed sources, once the takeover is completed, Infosys will bring down costs and restructure operations to make it a paying proposition.

This will be Infosys' second acquisition in its 25-year history, after it had acquired Expert Information Services in Australia for around Rs 104 crore ($22.9 million) in 2003.

The acquisition of Philips will bolster the capabilities and reach of Infosys' BPO, enabling it to deliver round-the-clock. Philips' F&A captive has operations in Chennai, Warsaw (Poland) and Bangkok. The global staff strength of the captive is around 1,500 with 500 employees working out of the Chennai centre, which was set up in 2004.

Infosys' BPO has close to 11,000 employees and has posted a top line of around Rs 662 crore and a net profit of Rs 151 crore in FY07.

Infosys, the country's second largest software services exporter, currently has cash reserves of $1.4 billion. No official comments were available from the company. Usually conservative in the M&A game, the company has grown to $3.5 billion and employs around 71,000 professionals.

In the recent past, it was rumoured to be bidding to acquire Capgemini. The company officials have predictably been non-committal and maintained that they will go ahead and acquire it, if it fits into the Infosys' game-plan.