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Infosys likely to acquire European SAP firms
By siliconindia
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Monday, 23 February 2009, 20:28 IST |
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Bangalore: In a bid to earn more revenue from SAP-based services, India's second largest IT company Infosys has identified European SAP services firms BCC and Ciber Novasoft as the potential target for acquisition, reported The Economic Times.
200 million firm BCC, based in Poland has a significant presence in German market and is expected to help Infosys address the local market as well. The acquisition could cost Infosys well over $300 million. According to a source, the discussions gathered momentum in December last and are still under way.
Ciber Novasoft, another acquisition target of Infosys is a part of the U.S.-headquartered Ciber which had acquired Novasoft in August 2004 for an undisclosed sum.
An informed source said "Despite valuation challenges, it still makes sense for Infosys to acquire a SAP aggregator (after losing out on Axon) at the right value. At any time, it is chasing multiple buyout targets, but it is a question of price and what value it brings to the table."
Infosys had last year made a $753-million offer for U.K. based SAP aggregator Axon, but it backed out when domestic rival HCL made a competing bid, bettering Infosys' original 600-pence offer. "What attracted Infosys to Axon was the quality of business and its size. There are not too many SAP firms of that size for the company to chase, if it is still chasing SAP buyouts. It has offered 2x valuation to Axon ($407 million), which it is unlikely to put on smaller targets," said a sector observer on the request of anonymity.
"With clients holding back or delaying 'foundational investments' delivering long-term value in a risky climate, Infosys would probably be justified in turning more conservative on valuation of SAP assets," the observer added.