Infosys Technologies’ proposed ₤407 acquisition of United Kingdom-based SAP services provider Axon Group plc signals ongoing consolidation in the IT services market and a desire by larger providers to counterbalance their exposure to the slowing North American economy, experts said this week.
Infosys, a $4.4 billion Bangalore, India-based provider of IT outsourcing and consulting services, said this week that it hopes to complete its acquisition of Axon by November. Infosys’ bid for publicly traded Axon represented a 19.4% premium over its share price just prior to the deal’s announcement. Axon’s share price quickly rose to around ₤6, the level of the Infosys bid.
Despite widespread speculation that a counteroffer for Axon might be forthcoming, none had yet surfaced by press time.
“Axon is a very important SAP integrator that had a lot of people looking at it, so I wouldn’t be surprised if there were a counterbid,” said Ray Wang, an analyst at Forrester Research, in an interview.