2. INFOSYS
Infosys Limited, formerly Infosys
Technologies Limited is an Indian
multinational provider of business consulting,
technology, engineering and outsourcing services
company. It is headquartered in Bangalore,
Karnataka.
Infosys' earlier acquisitions include Portland
(strategic sourcing and category management
services) in 2011, McAmish in 2009, Expert Info
in 2003 and IQ Financial in 2002.
3. INFOSYS FINANCIAL STATUS
Mar'12 Mar'11 Mar'10 Mar'09 Mar'08
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
EXPENDITURE
Profit 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 consultancy
committed to designing and delivering solutions
that enable international companies to thrive in
today’s complex business environment.
They help their clients to define the measurable
business benefits that they will achieve together
using our teams of client-focused consultants
who combine a passion for excellence with strong
process and SAP skills and in-depth experience
of transformational change in their industry.
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 THE
ACQUISITION
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.
10. SIX WAYS IN WHICH THE DEAL WILL HELP
INFOSYS
1)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.
11. 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.
12. 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.
13. 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.
14. 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
Lodestone's methodology and culture will transform
Infosys, Mumbai-based brokerage house Prabhudas
Lilladher saw it as a much-needed booster for the
struggling IT bellwether.
15. 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.
