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Infosys Acquires Axon
Infosys Technologies, the second biggest software exporter of India, is all set to acquire British consultancy Axon Group Plc for £407m. S Gopalakrishnan, CEO and Managing Director of Infosys apprised the media about the deal and briefed them about the share value of the consultancy firm. According to him Axon has been valued at six pounds per share, which means a 33 percent premium over the average price in the last six months. The price includes any interim dividend that may be declared when Axon announces when company's board meets on Tuesday.
Axon, founded in 1994,is a U.K. Based consultancy firm. The company with a gross profit of £56.3 mn had the profit margin of 15 percent in 2007.
Seen as a move to enter the European market with a bang, the deal will help the company to fulfill its dream of being the global SAP consulting services provider. The services are high in demand and Infosys wants to cash on it. The acquisition seems to have a positive effect on the Infosys share value with a gain of 0.5 percent. Prior to the announcement shares in Infosys which the market values at US$22bn rose to 1,703.05 rupees post announcement. The deal is most likely to get completed by the end of November this year.
With this acquisition Indian outsourcing firms have made their intentions of conquering the untested waters clear. Major IT giants such as Tata Consultancy, Infosys and Wipro are on a spree to acquire cross-border outbound firms in order to reduce the dependency on U.S. Market.
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