Indian IT firms aggressive expansion around the globe
Few days ago, I wrote about Infosys, India’s second largest IT firm, buying up UK based Axon Group PLC, a SAP consultancy firm. However, this is not the first acquisition by any Indian IT firm. In recent years, top Indian IT firms have become more aggressive in spreading their business abroad and building a strong foothold in the global IT market.
Infosys Technologies Limited (BOM:500209), the second largest IT firm offered Axon Group PLC (LON:AXO) a cash offer of £407m. The money is given from Infosys’ own fund. Infosys, which currently employs 90,000 people planned to buy up the UK based firm to increase its presence in the European market. After the news came out, Axon Group’s employees became afraid of losing jobs and mass outsourcing, but Infosys CEO, Kris Gopalakrishnan assured them that they are not going to outsource any job.
Last year, another Indian IT giant WIPRO expanded its business in USA by acquiring Infocrossing, an infrastructure management service provider. The deal cost WIPRO $600 million. Established in 1985, New Jersey based Infocrossing posted $229 million revenue in 2006. It has five branch offices around USA. The company also has subsidiaries to outsource IT related jobs. Two months after acquiring the company, WIPRO received a $275 million outsourcing deal.
Last year was a big year for the Indian IT companies because that year, Firstsource Solutions, promoted by ICIC Bank, bought US company, MedAssist Holdings with $330 million.
In April 2006, Subsex Systems, a Bangalore based Indian IT firm that specializes in telecom software acquired UK-based Azure solutions. The deal was worth $140 million, making it the biggest Indian IT industry acquisition. After the acquisition, Subsex-Azure became one of the top Telecom Revenue Assurance Systems in the world. Another acquisition of Toronto based Syndesis Limited by Subsex-Azure followed after seven months. It was an all cash deal worth $164.5 million.
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