Infosys acquires Philips BPO divisions

BANGALORE: Infosys Technologies Ltd has acquired three divisions of the business process outsourcing division of Royal Philips NV of the Netherlands for an undisclosed amount in an all cash-deal.

An Infosys spokesperson, however, declined to term it as an acquisition. The three divisions will be engaged in Finance and Accounting (F&A). Infosys will pay $20 million upfront to Royal Philips.

Meanwhile, Infosys has said in a statement that it had signed a multi-million dollar outsourcing contract with Royal Philips Electronics. The deal size is around $250 million, sources said.

As part of the agreement, Philips would enter into a multi-year contract with Infosys BPO to provide F&A services and the processing of purchasing orders.

Infosys would also acquire three shared service centers located in India, Poland and Thailand from Philips. The contract was amongst the largest Finance & Accounting BPO engagements from India and would expand Infosys’s global network, particularly strengthening its European operations.

“Infosys clearly demonstrated a willingness to invest in people with a strong HR process, better solution quality, ability to leverage end-to-end process improvements and a robust risk mitigation and transition plan. Their leadership capabilities were clearly evident in all interactions and proposal submissions, with a strong focus on the customer,” said Gerard Ruizendaal, chief strategy officer and group controller for Royal Philips Electronics.

The deal extends Infosys’s global network with new centers in India, Poland and Thailand. Infosys will gain approximately 1,400 Philips professionals who will add to the Infosys BPO team a wide range of valuable skills and abilities, which include diverse language capabilities, technical expertise and domain knowledge.

“Global corporations require transformation partners like Infosys to enhance their competitiveness in the flat world,” said S. Gopalakrishnan, CEO, Infosys Technologies Limited. “We are excited to partner with Philips to take their F&A and procurement functions to the next level of transformation,” he added.

The deal with Philips reinforces Infosys’s leadership position in transformation-based BPO services. Infosys BPO has seen significant growth of over 70 per cent in revenues and an increase in client base of over one-third in FY2007.

“During our interactions with the Philips employees, we found them to be very bright with a high level of energy and strong skill-sets. We look forward to welcoming them to the Infosys family,” said Amitabh Chaudhry, CEO, Infosys BPO. “The deal will further enhance our capabilities and make us one of the top 5 players in the F&A outsourcing space in the world.”