Infosys, on Monday, announced that it had signed a definitive agreement to fully acquire U.S.-based automation technology provider Panaya for an enterprise value of $200 million.
This is the company’s second largest acquisition after it acquired Zurich-based consulting company in 2012 for around $350 million.
According to a company release, the buyout of Panaya is expected to close before March 31, subject to customary closing conditions.
The acquisition comes at a time when the newly appointed non-founder CEO Vishal Sikka is betting big on automation, design thinking, cloud and artificial intelligence.
“This acquisition reflects the company’s execution of its ‘renew’ and new strategy to enhance the competitiveness and productivity of current service lines by leveraging automation, innovation and artificial intelligence,” the statement added.
Commenting on the acquisition, Mr. Sikka 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.”
Earlier, Mr. Sikka had said, Infosys was looking at acquiring innovative companies in the field automation, innovation and artificial intelligence.
The CloudQuality suite of Panaya will allow Infosys to bring automation to its service lines through agile software as a service (SaaS) model, help mitigate risk, reduce costs and shorten time to market for clients.
The move to buy Panaya comes at a time when Infosys was facing criticism from analyst for its slow approach in acquisition with a huge cash pile. According to the company, it had a cash and cash equivalents of Rs.34,873 crore as on December 31, 2014.
Panaya, Inc. CEO Doron Gerstel 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 mid-size acquisition allows Infosys to onboard the new IP without facing any hassles and also prove easier and lighter for the teams to integrate. With clear benefits on automation, Panaya will offer significant differentiated advantage to Infosys for its testing services, which continues to be a manual process for many service providers,” said Sanchit Vir Gogia, Chief Analyst and group CEO, Greyhound Research.