Indian outsource giant seeks Europe footing
India's outsourcing giant Infosys has agreed to buy UK-based consultancy Axon for £407.1m, in a move to strengthen its position in Europe.
The acquisition values Axon, which specialises in SAP consulting, at £6 per share - a 19.4 per cent premium on the company's price of £5.025 on the London Stock Exchange at the close of Friday last week.
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The deal has the backing of Axon's board members and is supported by both its founding and large shareholders. The transfer of ownership to Infosys, India's second largest IT services company, is expected to be completed by November 2008.
Infosys CEO, Kris Gopalakrishnan, said in a statement: "We are excited about this acquisition. The strategic combination of our groups will accelerate the realisation of our common aspiration to become the most respected provider of business transformational services in the global marketplace."
Roy Merritt, non-executive chairman of Axon, said the offer was too good to refuse and had to be recommended to the shareholders. He said in a statement: "Against the background of the global economic environment and increasing consolidation in the IT services industry, the combination with Infosys represents a compelling proposition."
Kate Hanaghan, analyst at researcher Bathwick Group, said: "While the fit's good and the price seems reasonable, the rest is all about how well Infosys can execute on the integration."
This takeover by Infosys, based in the high-tech city of Bangalore - which came second in silicon.com's special report on Tech Hotspots - is yet another example of India's tech companies trying to increase their global footprint.