After the failed effort to acquire UK-based SAP consulting major, Axon Plc, which was eventually bagged by HCL Technologies for ?441 million in December last year, India?s second largest software exporter, Infosys Technologies is looking at a string of mid-ticket acquisitions in the US and the European market. Business Process Outsourcing (BPO) is one of the areas where the company is actively scouting for acquisitions.
?BPO is one of our target areas for acquisition. We are also looking at companies in the consulting and the infrastructure management space,? said a company official.
However, the offcial added that the company was not looking at big-ticket acquisitions and has an outlay of $100-$200 million for deals in each of these services. Infosys had cash and cash equivalents of over $2 billion as on March 2009.
According to sources in the company, Infosys had set a target of generating over $1-billion revenue from its BPO unit. However, the current economic crisis made its plans go awry. Infosys BPO, which is a wholly owned subsidiary of Infosys Technologies, reported revenues of $316.2 million for the financial year 2008-09.
?Infosys BPO is strong in the telecom and financial services verticals. Therefore, companies which can bolster our offering in this space and have a unique platform or IPR to offer transaction based services will be a good fit,? said the official. In an effort to derive better margins and reduce the dependency on headcount, majority of India?s top BPOs are trying to move away from voice-based offerings as they increase their focus on transaction-based services and experiment with newer models of pricing like output-based pricing.
However, Infosys is not looking at the domestic market for acquisitions. ?India-based entities can only give us scale, which we can easily generate by upping our headcount. We are looking at companies that can give us the front-end in terms of markets and clients. The offshore and the offshore mix can later be re-balanced,? he added.
In an interview earlier this month, Amitabh Chaudhry, CEO of Infosys BPO had said the company is looking at buying outsourcing firms in the US and Europe.
