India IT services major Infosys is actively seeking acquisitions to bolster its capabilities in data analytics and software as a service (SAAS), with a focus on expanding its presence in Europe and the US.
In a recent interview with PTI, Infosys CEO Salil Parekh confirmed the company’s acquisition strategy, as reported by the Economic Times.
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When asked if future acquisitions could be as large as Germany’s in-tech, which cost €450m ($503m), Parekh responded: “Absolutely, I think those would be the size that we will look at in terms of scale, and given our structure we could do a few of those.”
This follows the company’s acquisition of InSemi Technology Services in January for up to Rs2.8bn ($33.3m) and the larger purchase of in-tech for approximately €450m.
“…we have very good business in engineering services already within Infosys and then we did those two acquisitions, both of them in engineering services, one on semiconductor side and one on the automotive side… very strong businesses, and we feel quite good about expanding that footprint,” the executive said.
He added that: “…we have a good balance sheet and good cash generation and now we are quite comfortable with the integration of acquisition in different areas. We have done engineering services, we will look at other areas… for example data analytics… may look at SAAS (software as a service) areas, and maybe at some other geographies in Europe, maybe the US as well.”
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By GlobalDataParekh elaborated on the company’s approach, noting the importance of strategic synergies, financial cost, cultural fit, and integration aspects in their acquisition considerations.
“We are continuing to look, and we have things that are normally in the pipeline but those take their own time,” he said, highlighting the ongoing nature of such discussions.
While Infosys is evaluating several firms for potential acquisition, Parekh indicated that it is challenging to predict when these deals might conclude.
“It is difficult to say… we are evaluating several (of them). But to get a fit on the strategic parameters, financial parameters, culture, integration… all of it may not work out. But these two (InSemi and in-tech) happened relatively quickly… before that for some quarters we had not done anything. It is not a predictable thing, but the evaluation is ongoing,” he concluded.
