Thirdpersonmatt

Infosys Technologies, India’s second largest IT services company has taken over the British Consultancy Axon Group Plc for well over 407 million pounds($753 million) or roughly Rs 3000 crores. Its being touted as the largest acquisition in Indian IT space. It would be an all cash deal valuing Axon at 6 pounds per share which is 19.4% premium over the last Fridays closing price of Axon which is listed in LSE.

The deal announcement was made in a press conference on 25th Aug,2008 by CEO Mr.Kris Gopalakrishnan. The current market cap of the Axon group is about $600 million. The deal value includes any interim dividend Axon group may announce when its results come out on 26th Aug,2008.

Its a good deal considering Infy was sitting on a cash pile of Rs 7000 crores which was not generating any returns for the company. Infosys also wanted to enter Europe in a big way and they did the same with this acquisition.Axon is basically a SAP consultant which will further give a boost to the company.

Meanwhile Axon will also get delisted from the LSE in the coming days and the deal may be completed by the end of Nov 2008. The Infy ADR was down by over 2% in yesterdays trade in the US markets. The Infosys stocks may be beaten down in the Indian markets too today. The IT space which is facing a tough time in the US currently want to expand in Europe, middle east, South east Asia, China and Japan. Considering this, it is a very good move to acquire a company based in Europe.Axon has client tele in US, China, Europe etc.

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This entry was posted on Tuesday, August 26th, 2008 at 4:30 am and is filed under Computers & Internet, Stock Market News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.