Infosys acquires Panaya, Inc. for $200 million
Infosys (NYSE: INFY) today announced a definitive agreement to fully acquire Israeli company Panaya, Inc., a provider of automation technology for large scale enterprise software management, in cash, for an enterprise value of $200 million.
The company, which has been beleagured by leadership failure in recent years, says that the acquisition of Panaya is part of its Renew and New strategy to enhance the competitiveness and productivity of current service lines by leveraging automation, innovation and artificial intelligence. Panaya’s CloudQuality™ suite is expected to position Infosys to bring automation to several of its service lines by way of an SaaS model, and is expected to help mitigate risk, reduce costs and shorten time to market for clients.
Commenting on the acquisition, Dr. Vishal Sikka, CEO and Managing Director of Infosys said, “The acquisition of Panaya is a key step in renewing and differentiating our service lines. This will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients. At the same time, Panaya’s proven technology helps dramatically simplify the costs and complexities faced by businesses in managing their enterprise application landscapes.”
Doron Gerstel, CEO of Panaya, Inc. said, “We are excited about leveraging Infosys’ global reach, service footprint and broad customer base to deliver compelling, simplifying, value to clients. I am confident this integrated proposition will uniquely position Infosys as the services leader in the enterprise application services market.”
The transaction is expected to close before March 31, 2015, subject to customary closing conditions.
Last month Infosys, which is India’s second largest exporter of IT services, reported revenue of $2,218 million, a 2.6% growth over the previous quarter, while net profit increased to $522 million, a growth of 2.2% over the previous quarter.
Chief Analyst and CEO at Greyhound Research, Sanchit Vir Gogia, observed last month that the dollar growth rate was rather dilatory. “While Vishal Sikka has done a great job in mapping the long term strategy, the market will continue to look out for softer signs of improvement in short and medium term.”
Sikka was appointed CEO and MD of Infosys in June 2014 after a series of lawsuits and visa fraud offenses forced the company to reevaluate its leadership and recalibrate its strategies. In 2013 Infosys agreed to pay $34 million in penalites to the United States government after it was discovered that the company had indulged in fraudulent visa practices. At the time it was the largest penalty of its kind imposed on a company, and the fines were distributed as follows: $5 million to U.S. Homeland Security Investigations, $5 million to the U.S. Department of State, and $24 million to the U.S. Department of Justice.