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Infosys to buy Lodestone for $350 mn

Infosys to buy Lodestone for $350 mn

Bangalore: India’s second biggest software exporter Infosys Ltd said it will acquire Swiss technology consulting firm Lodestone Holding AG for $350 million, as the company aims to increase its revenue from European customers and widen its lead over rivals such as Cognizant Technology Solutions Corp.

“A key plank of our Infosys 3.0 strategy is to expand our consulting and systems integration business. This acquisition fits perfectly into that strategy," Infosys CEO S.D. Shibulal said on Monday.

Despite $3.7 billion in cash at the end of the June quarter, Infosys has been under pressure over the past few quarters to regain double-digit growth rates and fend off aggressive rivals such as Cognizant.

“Infosys is clearly following Accenture’s consulting-led model as this acquisition shows. This will take some shareholder pressure off their back and they can now focus on execution," said a Mumbai-based brokerage analyst requesting anonymity because his firm does not allow media interviews.

Lodestone’s 750 SAP professionals will become a part of Infosys’s consulting division that counts customers such as the Procter and Gamble Co.

Shares in Infosys jumped over 1% in early trade on BSE and were last trading 0.21% higher at Rs2,501.05 apiece on Monday.

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