India’s second largest software exporter Infosys Technologies has announced that it has acquired the software solutions business of Gen-i, as part of its partnership with the Telecom New Zealand Group firm. As part of the deal, Infosys has offered positions to Gen-i's more than 110 employees and contractors, who will continue to be based in Auckland, Wellington and Christchurch, Infosys said in a statement.
These employees, who are primarily senior developers, technical architects and consultants, will take the Infosys' New Zealand team to over 150 people, it added. The company said it also plans to immediately hire an additional 15-30 people there. No financial details were however disclosed.
The partnership will be undertaken by Infosys' Australian arm and Gen-i, the corporate ICT arm of Telecom New Zealand. The current software solutions management team will lead New Zealand delivery for Infosys, with Patrick Kouwenhoven running New Zealand operations under the leadership of Infosys Associate Vice-President Ashok Mysore.
The companies will offer IT services like IT consulting, business transformation and cloud-based offerings to Australasian companies. Australasia is a region of Oceania comprising Australia, New Zealand, the island of New Guinea and neighboring islands in the Pacific Ocean.
The partnership is said to create a new market proposition for local businesses by helping them to transform for competitive advantage, with new ways to innovate, reduce costs and increase the effectiveness of their people, processes and technology according to Infosys.
As near-shore delivery from New Zealand is among the joint growth strategies being planned, the partnership also has significant potential to further grow New Zealand-based technology jobs, it added.
Gen-I currently works alongside its 3,300 corporate, government and business customers to offer integrated ICT solutions. It has nearly 3,000 highly skilled people in 17 locations across New Zealand and Australia. "There has been a lot of consolidation in the IT services market recently, leaving an opportunity for a strong local partnership which can deliver world class capabilities in hosted and integrated ICT solutions," Gen-i Australasia CEO Chris Quin said.
Several Indian technology players including Infosys's rivals Tata Consultancy Services and Wipro have been looking for overseas acquisitions to boost growth amid growing competition from global rivals, and to reduce dependency on the U.S. market.
This has so far resulted in the rumored interest of Infosys in the soon-to-be-sold Mysis. Amidst the current bout of speculations regarding a possible takeover bid for Misys plc, Jefferies & Co. revisited its long-held view that it is now in the final phase of the value realisation project that Mike Lawrie and ValueAct Capital embarked upon four years ago.
"We think the remaining two divisions are likely to be sold. We see upside of at least 20 percent from current levels and reiterate our 'Buy' rating," said Milan Radia, an analyst at Jefferies. Radia said Misys has fully separated its core banking and capital markets divisions, perhaps indicating its willingness to sell these divisions separately. In the absence of a full bid, Misys will, in the analyst's view, seek to sell core banking first.
The Indian vendors, Infosys Technologies Limited are obvious candidates, in Radia's view, given their strength in banking software. This assumption is based on the information emanating from Infosys indicating that they are on the lookout for acquisitions with a cash chest of more than $3.7 billion, and has an appetite to acquire companies that could go close to a billion US dollars, its CEO-designate SD Shibulal said.
"We can easily absorb acquisitions that are around 10% of our total revenue base of $6 billion, but if need be we are ready for bigger acquisitions as well," the co-founder who is due to be elevated from the chief operating officer's position," said in an interview recently.
He said the company, which is mainly looking at building competencies through buyouts, was eyeing a deal size of between $300 million and $900 million. "As and when the opportunity (for acquisition) comes the cash available with us would come handy."The Bangalore-based giant has so far been conservative in buyouts while its cash chest has been growing since last year.
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