Infosys is keen on acquisitions in data analytics, SAAS space, says CEO Salil Parekh

Infosys, India’s second-largest IT services company, is looking to acquire more companies after making two acquisitions this year and says deals on the scale of its recent tech acquisitions are certainly possible.

Infosys CEO Salil Parekh told PTI in an interview that the company is keen on acquisitions in areas such as data analytics and SaaS and may also look at parts of Europe and the US.

Asked whether further acquisitions of a similar size to the Intec deal, which had a price tag of 450 million euros, were possible, Parekh said: “Of course, we would consider something of that size in terms of size. Given our organisational structure, several such acquisitions are possible.”

In January, Infosys announced a definitive agreement to acquire 100% of the equity capital of InSemi Technology Services, an India-based semiconductor design services company, for total consideration of $1 million, including earn-outs, management incentives and retention bonuses. ₹28 billion rupees.

An even bigger acquisition followed three months later.

In April, Infosys Deutschland, a wholly owned subsidiary, signed a definitive agreement to acquire 100% of the share capital of Intec Holding, a leading provider of engineering R&D services headquartered in Germany, for up to 450 million euros (approximately 15 billion yen). ₹4,045 crores).

“Infosys already had a very strong business within engineering services and then we made two acquisitions in engineering services, semiconductors and automotive. It’s a very strong business and we’re happy to be able to expand that base,” Parekh said.

Infosys also said it is considering further acquisitions and is evaluating several companies.

“…we have a good balance sheet, good cash flows and are very happy right now with the integration of acquisitions in different areas. We do engineering services and we are looking at other areas…for example, data analytics…the SAAS (software as a service) space and maybe looking at other parts of Europe and even the US,” he said.

However, Parekh said a lot would depend on strategic synergies, financial costs, cultural fit and integration aspects.

“We continue to look at it and typically there are some in the pipeline but they take their own time. There are a lot of discussions around strategic fit, financial cost, cultural fit and how to integrate them. A lot of those discussions are ongoing and we will wait and see how they turn out,” the Infosys chief said.

Asked whether the company expects to complete further acquisitions this financial year, Parekh suggested it would be difficult to announce the outcome of ongoing discussions in time.

“It’s hard to say. We are evaluating (some of them). But to get the strategic parameters, financial parameters, culture, integration fit, not everything will fall into place. But these two (InSemi and in-tech) came together relatively quickly. The quarters prior to that, we hadn’t done anything. It’s not something you can predict, but the evaluation is ongoing,” he said.

India saw an overall 501 deals valued at US$ 21.4 billion, according to Grant Thornton’s Bharat Deal Tracker Q2 2024 report. The report noted that Q2 2024 saw the highest quarterly deal volume since Q2 2022, while value declined due to the absence of any large mergers and acquisitions deals.

The Grant Thornton Bharat Deal Tracker further noted that mergers and acquisitions (M&A) activity in the second quarter reached US$ 6.2 billion across 132 deals, a slight increase in number but a significant decline of 50 percent in value.

According to the report, domestic deals led the growth, with volume up 29% and value up 2.5 times compared to the first quarter of this year. In contrast, cross-border deals declined, with volume down 24% and value plummeting 85% compared to the first quarter of 2024.