Infosys expands SAP abilities

Indian services provider will acquire SAP consultant Axon for £407.1m

Indian services provider Infosys will acquire British SAP consultant Axon for £407.1m ($753m).

The acquisition is the largest that has ever been made by an Indian IT company overseas.

It will allow Infosys to expand its consulting capabilities to remain competitive with global services giants - including IBM, Accenture and EDS - and ensure Infosys continues to expand into new geographies as the US economy slows down.

“In an increasingly competitive and challenging market environment, we have been particularly focused on margin protection,” said Stephen Cardell, Axon chief executive officer in a statement.

“We have been strengthening our off-shore delivery capability with new delivery centres in China, Penang (Malaysia), India and Puerto Pico and our resources in these centres now account for 33 per cent of total headcount,” he said.

Chief financial officer at Infosys, V. Balakrishnan, said consulting was 24 per cent of Infosys' business and one third of that was provided to SAP projects. "It has been growing by 65 per cent in the last three years," he said.

The Infosys move also fulfils analyst firm Gartner’s latest recommendations – for Indian service providers to move away from resource-intensive growth to provide more high-end services, in order to maintain their success.

Under the terms of the acquisition, Axon Shareholders will receive for each Axon Share 600 pence in cash.