Infosys to acquire Axon Group

Posted on August 26, 2008
Filed Under Mergers and Acquisitions |

India’s Infosys Technologies has made an offer to acquire UK based Axon Group Plc in an all cash deal worth £407.1 million ($753 million), or Rs.3,269 crore. This is the biggest overseas acquisition by an Indian IT outsourcing company. Wipro’s deal to buy US tech firm Infocrossing Inc. last year for around $600 million (Rs.2400 crore) was the previous benchmark. The deal, if consumated, would allow Infosys to enhance it’s foothold in Europe, besides enhancing it’s SAP software and consulting capabilities.

This would be the third acquisition for Infosys since it went public in 1993. It earlier bought Expert Information Services Pty Ltd in December 2003 for Rs104 crore and bought three back-office delivery centres for Rs114.8 crore from Royal Philips Electronics in July 2007.

Founded in 1994, Axon has around 2000 employees at it’s offices in the US, North America, Australia and Malaysia. Some of their major clients include British Petroleum and Xerox Corp. For 2007, the company reported a net profit of £20.2 million (Rs.160 crore) on revenue of £204.5 million (Rs.1,660 crore) for 2007. It is debt free. Axon’s operating profit margin for 2007 was 15% and net profit margin at 9.9%, which was quite lower as compared to Infosys’ operating profit margin of 30.4% and a net profit margin of 26.8% in the April-June quarter.

According to Infosys CEO, S.Gopalakrishnan,

“The strategic combination of our groups will accelerate the realization of our common aspiration-that of becoming the most respected provider of business transformational services in the global marketplace.”

Infosys and Axon were represented by ABN Amro Corporate Finance and Citibank respectively. The deal is likely to be completed by November ‘08. 

 

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One Response to “Infosys to acquire Axon Group”

  1. HCL goes head to head with Infosys over Axon buy on October 2nd, 2008

    [...] on September 27, 2008Filed Under Mergers and Acquisitions | Barely weeks after Infosys announced it’s plans to acquire the Axon Group, HCL Technologies has decided to make a counter offer [...]

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