Information Technology (IT) services giant Infosys has signed an agreement to buy US-headquartered automation technology provider with a substantial Israel base, Panaya Inc, for an enterprise value of $200 million (Rs 1,244 crore) in an all-cash deal. “This will help amplify the potential of our people freeing us from the drudgery of many repetitive tasks,” Vishal Sikka, MD and CEO, Infosys, said about the first acquisition after he took charge six and a half months ago. The deal will be completed by March 31.
For Infosys, which has a cash reserve of $5.4 billion (Rs 33,600 crore), this is the second largest acquisition after it bought Switzerland-based SAP services company Lodestone for $345 million in September 2012.
The deal comes at a time when IT services companies are laying greater emphasis on automation to bring down human resource costs. Infosys, TCS, Wipro and HCL have been deploying automation to enhance deliveries.
Infosys said the acquisition is in line with its strategy to enhance the competitiveness and productivity of current service lines by leveraging automation, innovation and artificial intelligence what the company calls “Renew and New”.
“Panaya’s CloudQuality™ suite positions Infosys to bring automation to several of its service lines... and helps mitigate risk, reduce costs and shorten time to market,” Infosys said.
With repetitive tasks taken care by Panaya’s technology, Infosys can focus “more on the important, strategic challenges faced by our clients,” Sikka said.
Doron Gerstel, CEO, Panaya Inc said, “We are excited about leveraging Infosys’ global reach, service footprint and broad customer base. I am confident this integrated proposition will uniquely position Infosys as the services leader in the enterprise application services market.”
Infosys has been traditionally shy of acquisitions, making less than half a dozen buyouts in its 33-odd years of existence, mostly smaller than $50 million.