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Lodestone acquisition by infosys

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  • 1. LODESTONE ACQUISITION BY INFOSYS Presented By: Pradeep kumar Tiwari Enrol no.-1103102183
  • 2. INFOSYS Infosys Limited, formerly InfosysTechnologies Limited is an Indianmultinational provider of business consulting,technology, engineering and outsourcing servicescompany. It is headquartered in Bangalore,Karnataka. Infosys earlier acquisitions include Portland(strategic sourcing and category managementservices) in 2011, McAmish in 2009, Expert Infoin 2003 and IQ Financial in 2002.
  • 3. INFOSYS FINANCIAL STATUS Mar12 Mar11 Mar10 Mar09 Mar08 TOTAL INCOME 33,002.00 26,493.00 22,011.00 21,138.00 16,326.00 TOTAL 21,191.00 16,970.00 13,778.00 13,356.00 10,684.00 EXPENDITUREProfit and Loss for 7,905.00 6,404.00 5,707.00 6,191.00 4,465.00 the Year Shares in Issue 5,742.30 5,741.52 5,738.25 5,728.30 5,719.96 (Lakhs) EPS - Annualised 147.50 112.22 101.13 101.58 78.15 (Rs)
  • 4. LODESTONE Lodestone is a global management consultancycommitted to designing and delivering solutionsthat enable international companies to thrive intoday’s complex business environment.They help their clients to define the measurablebusiness benefits that they will achieve togetherusing our teams of client-focused consultantswho combine a passion for excellence with strongprocess and SAP skills and in-depth experienceof transformational change in their industry.
  • 5. LODESTONES UNITS AND HOWTHEY DIVERSIFY INFOSYS
  • 6. ACQUISITION PROCESS Infosys,acquired Zurich-based Lodestone Holding AG, a leading management consultancy firm, for 330 million Swiss francs ($345 million or Rs.1,925 crore), which is expected to strengthen the company’s consulting capabilities. Infosys will pay two-thirds of the amount immediately while the rest is to be paid after three years. At present, consultancy businesses contribute 31 per cent of Infosys’ revenues.
  • 7. FINANCIALS OF THEACQUISITION This is an area in which even the strongest Infosys bashers must give it credit. Looking at the revenue multiples paid by service providers for some of their recent acquisitions:  HP-Autonomy: 11x  HCL-Axon: 2.2x  Wipro-Infocrossing: 2.6x  TCS-Citi BPO: 1.9x  Infosys-Lodestone: 1.6x
  • 8. MAIN REASON BEHIND ACQUISITION The Lodestone acquisition will significantly enhance Infosys global presence, particularly in  continental Europe and  emerging markets like Latin America and Asia Pacific. The acquisition may take Infosys a step closer to its goal of becoming a software-and-services giant providing clients with higher value services and consulting. The company has recently completed implementing Infosys 3.0, a strategy that it expects will take it towards this goal. To compete with the competitors.
  • 9. SIX WAYS IN WHICH THE DEAL WILL HELP INFOSYS1)Clients: Lodestone will bring in its more than 200 clients across sectors, including manufacturing, automotive, life sciences, chemicals, and consumer goods. Its clients like BMW, Allianz, Kimberly- Clark,Sandoz SHAPE, Warner Chilcott, Munich Re, Roche will now be with Infosys, which has a client base of 700 firms. The acquisition is also expected to boost Infosys SAP client base.
  • 10. 2)Revenues: In 2011, Lodestone reported revenues of 207 million Swiss Francs (Rs 1,200 crore), up from 181 million Swiss Francs in 2010. This will increase Infosys annual revenue and help it maintain its lead over other rivals like Cognizant and Wipro. Post-acquisition, the consulting and package implementation revenues of Infosys are expected to be more than $1 billion, according to analysts.
  • 11. 3) Geography: The deal will bolster Infosys presence in Europe, Middle East and Africa. "In the short term, the economics of EMEA will work against Infosys as Eurozone concerns amplify into 2013.• Long-term, the acquisition may prove itself out as Infosys gains a greater foothold through consolidation," said Ray Wang Principal, analyst and CEO at Constellation Research, in a report. The acquisition will also enhance the presence of Infosys in new markets like Latin America and Asia Pacific.
  • 12. 4) Employees: Zurich-based Lodestone has about 850 employees, including 750 SAP consultants. The consultants will help Bangalore-based Infosys to ramp up expertise in SAP-based solutions.
  • 13. 5) Perception: The deal will go a long way in helping Infosys shake off its image as a conservative company hesitant to make bold acquisitions. While research firm Constellation Research said Lodestones methodology and culture will transform Infosys, Mumbai-based brokerage house Prabhudas Lilladher saw it as a much-needed booster for the struggling IT bellwether.
  • 14. 6)Lodestone methodology and culture will transform Infosys. Lodestone brings it’s trademark IDEA methodology. IDEA represents insight, design, execute, and achieve. This approach aligns with Six Sigma standards and SAP ASAP to improve the quality of implementation outcomes.