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BANGALORE: Infosys Technologies, India’s second-largest software exporter, has identified European SAP services firms BCC and Ciber Novasoft, among others, as potential acquisition targets. This is part of the company’s move to increase revenues from SAP-based services and compete more effectively.
At least two people familiar with the discussions told ET on condition of anonymity that while Infosys was evaluating the potential acquisition targets, a final transaction could be still far away. “Especially, since there is no agreement yet on the valuation of BCC and the SAP services unit of Ciber,” one of the sources told ET last week.
A banking source said the attractiveness of SAP firms as acquisition targets was on the decline, as their clients have scaled back committed application softwareinvestments in a downturn. “For instance, one of Infy’s targets has a list of manufacturing clients who have cut back on IT spends in the changed economic scenario. This has led to significant valuation challenges, as the German firm continues to holds on to its earlier price tag,” he explained.
Headquartered in Poland and with a significant presence in the German market, BCC will help Infosys address the local market as well. “BCC has revenues of $180-200 million approximately and it could cost well over $300 million for Infosys,” said an informed source. He added that the discussions gathered momentum in December last and are still under way. BCC serves customers like BASF, ABB and Knauf.
German SAP consulting and services firm, Ciber Novasoft, with almost $75 million in revenues from the country, is a part of the US-headquartered Ciber. Ciber acquired Novasoft in August 2004 for an undisclosed sum. Spokespersons at Infosys, BCC and Ciber Novasoft did not respond to an emailed query from ET.
Sources by:
The Times of India
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