Infosys To Acquire Lodestone For CHF 330 Million
DSIJ Intelligence / 10 Sep 2012
Infosys on Monday, 10 September 2012 announced that they would be acquiring a Swiss based leading global management consultancy firm, Lodestone Holding AG for an aggregate enterprise value of CHF 330 million (approximately Rs.1927.73 crore)* in cash. With the company going through a series of events such as missing revenue guidance, posting negative revenue growth and lowering guidance to unimpressive numbers, Infosys was also surrounded by talk of inaction on the acquisition and called rather conservative by analysts. The company had cash reserves to the extent of USD 4 billion and had been actively looking at acquisitions to leverage their subdued performance and strengthen their standing in the industry.
Lodestone Holding AG provides companies with advice on devising innovative business operating models, optimising processes and implementing new technologies leveraging SAP. The company has expertise in the industries of Life Sciences, Consumer Goods, Automotive, Financial Services, Banking and Industrial Equipment. As of August 2012, the company had 858 employees and revenues to the extent of CHF 207 million (approximately Rs.1209.22 crore)* at the end of 2011.
The completion of this acquisition will result in the strengthening of Infosys Consulting and Systems Integration (C&SI) capabilities and the combined Consulting practice focussing on SAP programs will deliver revenues of more than USD 1 billion, firmly establishing Infosys amongst global leaders in SAP consulting. For the quarter ending 30 June 2012, Consulting, Package Implementation & Others contributed to 29.9 per cent of the company’s revenues. This business of Infosys currently has more than 30000 consultants across 10 industry verticals. The acquisition will leverage the position of Infosys giving it exposure in geographies like continental Europe and in emerging markets like Latin America and Asia Pacific.
Investors had been longing for Infosys to act on the acquisition. Now that Infosys has found a right fit for its strategy that includes focus on the expansion of the Consulting & Systems Integration business, it would largely benefit the company to strengthen its position. On the back of this news, the stock price of Infosys was seen trading at an intraday high of 1.28 per cent.
*1 Swiss Franc = 58.4162 Indian Rupees as of 10 September 2012
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