Offshore software services provider Infosys Technologies is paying AUD 31m ($23m) to acquire Expert Information Services Pty Ltd, an IT services provider whose clients include Australian telecoms operator Telstra Ltd.
Bangalore, India-based Infosys won a five-year, AUD 75m ($55.6m) contract with Telstra in September to provide network and applications management, and the acquisition of Melbourne, Australia-based Expert is largely motivated by Infosys’ need to have an on-site support team.
Expert has 350 employees and made a net profit of AUD 7m ($5.2m) on revenue of AUD 46.7m ($34.6m) in the year to June 30, 2003. The company is currently trying to renew a five-year contract with Telstra to develop and support its main customer relationship management system.
Infosys will pay a cash sum on completion of the deal, plus an earn-out based on Expert meeting certain performance targets over a three-year period. The transaction is expected to be complete in January 2004, when Expert will operate as Infosys Technologies (Australia) Pty Ltd.
Telstra, which is majority owned by the Australian state, has come under fire from both the national press and government opposition over its decision to work with an Indian services company. Richard Hogg, national president of the Australian Computer Society, said earlier this year: The loss of these jobs overseas creates a drain on the economy since unemployed professionals have less money to spend on consumer goods, don’t pay taxes, and cost the government in social security payments.
This article is based on material originally produced by ComputerWire.