Infosys snaps up Lodestone in $349m deal
Lodestone, India's second largest software services exporter plans to boost its revenue through higher-end products and accelerated growth through the deal, Reuters reports.
Zurich-based Lodestone will contribute more than 200 clients to Infosys's 711-customer portfolio through the agreement. In addition, Infosys will gain another 850 employees on top of the company's 150,000 -- including 750 consultants who specialize in SAP.
Although the company is too small to make a huge impact on Infosys' balance sheet, it may quell criticism levied at the firm for previously avoiding acquisition deals -- as it sits on nearly $4 billion in cash -- and will promote the company's presence in Europe, its second-largest after the United States. Such deals may also help the firm compete with rivals including IBM and Accenture.
Lodestone's clients include BMW and pharmaceutical company Roche Holding. It advises clients on strategy, process optimization, and provides SAP business information solutions.
"We have lot of appetite for buying companies which will fit our strategic needs," Infosys CFO V. Balakrishnan said. "It's not just acquisition, internally there are a lot of steps that we will take to achieve high-quality revenue growth in the near future."
In 2008, Infosys attempted to purchase British consultancy firm Axon, but was outbid by rival company HCL Technologies.
Bangalore-based Infosys plans to complete the deal by the end of next month. The firm's annual revenue guidance for FY2012 will not change.