Indian giant buys UK firm

Infosys Technologies, number two in the IT services industry in India, has instigated a takeover of the Axon Group, a UK firm, with a cash offer of £407 million.

The movies part of Infosys’ move to gain a stronger foothold in the European market, and will see the three founders of Axon – a company formed in 1994 – take home almost £70 million a piece.

While Infosys has in its employ over 90,000 people in India, Axon – which operates as a consultancy to IT business in the UK – employs 2,000 and operates in conjunction with companies that use German software developer SAP’s products.  
    

£140 starting capital

Infosys was founded in 1981 with a capital of only £140, and has risen to the strong position it holds now thanks to the work of, among others, chief executive Kris Gopalakrishnan. He yesterday allayed fears that the move would mean job losses in the UK, as many believed the acquisition of Axon would lead to the company’s operations being moved to the Indian region.

Both operations are independent of each other, he explained, and the present staff is considered essential in order to make the take over a viable proposition.
    

Infosys cash pile

With Axon shares valued at 600p on the deal, funds for the takeover come from a cash reserve that Infosys has built up. Management figures at Axon, and the company founders who hold almost 18% of the company, are fully in favour of the takeover and believe it makes the best sense for the future of the company.

Mark Hunter, a Northern Ireland based IT wizard, was a member of the party of three that founded Axon in 1994, and stepped down from his position as company chairman in 2007. So well managed was the company that it was listed on the stock market just five years after inception.

Hunter has been scaling down his holdings in Axon of late to a level of just 11.5 percent of present.

Axon has operations in the USA, having purchased Feanix, a US rival, in 2005 and three other outfits in the next year, and also operates from stations in Asia, among them a base in the lucrative and growing IT market of China.   

Trading has been good for Axon, despite the downturn in the economy, and the company is due to announce its half yearly results this week.

Analysts are forecasting the company will report revenue of around the £120 million mark, and an operating profit somewhere in the region of £20 million.