Infosys Technologies Ltd is eyeing acquisitions in Mexico and Brazil to expand its delivery capability and grow business from local organisations in these geographies.
The company, which expects its first centre in Brazil to be operational in the next three to four months and currently employs about 250 people in Mexico, said it is important to have local facility to attract local business.
“We are looking for some very targeted acquisition with specific criteria,” said Mr Dheeshjith V G, Head, New Markets and Services, Infosys. He declined to comment on when the deals would be completed.
Infosys is interested in companies that own IP relevant to these markets, or in firms that have large clients headquartered in either Brazil or Mexico. Capabilities in Spanish, which is spoken in Mexico, and Portuguese, which is spoken in Brazil, are one of the key considerations as well.
large clients
“Currently, we are not working with such clients. By acquiring these entities, we will get an access into those large clients,” said Mr Dheeshjith. “These are basically to jump start the business into much larger proportions,” he added.
About 20-25 per cent of the total business in Infosys’ Mexico subsidiary comes from multinational companies that have operations in Mexico. The rest of the business comes from clients in North America.
Mr Dheeshjith said in the last couple of months, there has been an uptake in business from local clients and some companies are looking to outsource large transformational deals. Infosys started focusing on the Mexican market in the last six to seven months.
“We want to scale our operation to some extent and then proactively pursue local deals,” he said. “Once you built the local capability, it becomes easier to attract local customers,” he added.
Infosys expects to have about 100 people by the year-end at its centre in Belo Horizonte, Brazil.
Anchor deals
Mr Dheeshjith said the company has won two anchor deals to be delivered out of Brazil. “Initially, we will work for our existing clients who have operations in Brazil. At the same time, we will also acquire local clients.”
Energy, telecom, financial, retail and manufacturing are important sectors in Brazil, which is a fairly large market. The size of the market is more than $100-million market in the IT and the telecom space, he said.
Infosys is also looking to partner with IT companies in South Africa to enter the market, which it described as fairly large. “Talks are still in very early stages. We want to partner with local companies that have complimentary skills,” said Mr Dheeshjith.
He said local companies in South Africa enjoy government support and would help make Infosys’ entry into the market smooth.
Geographies such as Asia, Middle-East, Africa and Latin America comprise about 10 per cent of Infosys’ total revenue. The company expects to double the figure over the next three to five years.
Source: The Hindu Businessline