India's Infosys buys Swiss IT firm Lodestone for 330m Swiss francs in cash

India News Bulletin Desk
Infosys buys European IT company Lodestone
Image: Wikimedia Commons (Ashlyak)

Infosys, the Indian IT services and outsourcing company, is acquiring a Switzerland-based IT consultancy firm Lodestone Holding AG for 330m Swiss Francs (£198m) in cash. The acquisition makes Infosys one of the major players in SAP consulting.

SAP software helps large businesses manage their business operations and customer relations and companies such as Infosys helps enterprise IT to make good use of their SAP investment. The acquisition will help Infosys make its SAP consulting programs worth $1bn in revenue and expand its presence in continental Europe.

The transaction is expected to close in October 2012 and is subject to customary closing conditions. Upon completion, Lodestone’s 850 employees, including 750 experienced SAP consultants will become part of the Indian multinational.

Lodestone’s assets will strengthen Infosys’s Consulting and System Integration division. Infosys has been looking to expand its C&SI business. "This acquisition fits perfectly into that strategy," said D Shibulal, chief executive and managing director of Infosys.

The European company has more than 200 clients across industries including manufacturing, automotive and life sciences, which will be added to Infosys pool of over 700 clients.

Linklaters LLP, the London-based global law firm is acting as legal advisor to Infosys and UBS AG is acting as financial advisor and Chicago-based Baker & McKenzie is the legal advisor to Lodestone.

Infosys, founded by Narayan Murthy in 1981 has more than 150,000 employees worldwide and had a revenue of $7bn in 2012. The company reported a 16% growth in its last financial year despite the global economic slowdown and is expecting to report a double digit growth next year too.

Infosys was involved in a bidding war with another Indian IT services company HCL to buy British IT firm Axon Group which provided SAP consultancy services. While the Bangalore-based company offered £407m for Axon, it lost to rival HCL which offered £441m for the British company and subsequently acquired it.  

Just after the announcement of the Lodestone acquisition on September 10, 2012, Infosys shares gained 0.60% in the BSE Sensex reaching an intra-day high of 2527.95.

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