Infosys has reached a definitive agreement to acquire Zurich-based SAP implementation and management consultancy Lodestone, for about $350 million.
Lodestone, with 850 employees including 750 consultants comes with about 200 clients across manufacturing, automotive and Life Sciences verticals. Post acquisition, Infosys will have about a billion dollars coming from its SAP practice.
While it's still too early to say how the buy will play out, there are some immediately visible benefits.
1) Clients: Lodestone will bring in its more than 200 clients across sectors, including manufacturing, automotive, life sciences, chemicals, and consumer goods. Its clients like BMW, Allianz, Kimberly-Clark, Sandoz SHAPE, Warner Chilcott, Munich Re, Roche will now be with Infosys, which has a client base of 700 firms. The acquisition is also expected to boost Infosys' SAP client base.
2) Revenues: In 2011, Lodestone reported revenues of 207 million Swiss Francs (Rs 1,200 crore), up from 181 million Swiss Francs in 2010. This will increase Infosys' annual revenue and help it maintain its lead over other rivals like Cognizant and Wipro. Post-acquisition, the consulting and package implementation revenues of Infosys are expected to be more than $1 billion.
3) Geography: The deal will bolster Infosys' presence in Europe, Middle East and Africa. The acquisition will also enhance the presence of Infosys in new markets like Latin America and Asia Pacific.
4) Employees: Zurich-based Lodestone has about 850 employees, including 750 SAP consultants. The consultants will help Bangalore-based Infosys to ramp up expertise in SAP-based solutions.
5) Perception: The deal will go a long way in helping Infosys shake off its image as a conservative company hesitant to make bold acquisitions.
It looks like a great-fit acquisition; however the time will tell how it will help and how far Infosys can leverage this to generate more business.
Lodestone, with 850 employees including 750 consultants comes with about 200 clients across manufacturing, automotive and Life Sciences verticals. Post acquisition, Infosys will have about a billion dollars coming from its SAP practice.
While it's still too early to say how the buy will play out, there are some immediately visible benefits.
1) Clients: Lodestone will bring in its more than 200 clients across sectors, including manufacturing, automotive, life sciences, chemicals, and consumer goods. Its clients like BMW, Allianz, Kimberly-Clark, Sandoz SHAPE, Warner Chilcott, Munich Re, Roche will now be with Infosys, which has a client base of 700 firms. The acquisition is also expected to boost Infosys' SAP client base.
2) Revenues: In 2011, Lodestone reported revenues of 207 million Swiss Francs (Rs 1,200 crore), up from 181 million Swiss Francs in 2010. This will increase Infosys' annual revenue and help it maintain its lead over other rivals like Cognizant and Wipro. Post-acquisition, the consulting and package implementation revenues of Infosys are expected to be more than $1 billion.
3) Geography: The deal will bolster Infosys' presence in Europe, Middle East and Africa. The acquisition will also enhance the presence of Infosys in new markets like Latin America and Asia Pacific.
4) Employees: Zurich-based Lodestone has about 850 employees, including 750 SAP consultants. The consultants will help Bangalore-based Infosys to ramp up expertise in SAP-based solutions.
5) Perception: The deal will go a long way in helping Infosys shake off its image as a conservative company hesitant to make bold acquisitions.
It looks like a great-fit acquisition; however the time will tell how it will help and how far Infosys can leverage this to generate more business.
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