As Infosys closed the financial year of 2017-18 with financial numbers mostly in line with expectations, it also made a good effort to erase a part of its bitter past that led to a boardroom battle and differences with founders leading to the exit of the then CEO Vishal Sikka.
The new regime made its intention clear to grow the digital business by announcing an acquisition in the space. The company also said, it would sell off two key acquisitions – Panaya and Skava -- which were made under the leadership of the previous CEO, and wrote down Rs 5.89 billion ($90 million) in the investment value of Panaya.
CEO & MD Salil Parekh tried to evade questions if the decision was more to bury the controversy saying it was part of the strategic review of the investments the company has made so far, and the products, solutions it has in its kitty. “My view is, I am looking at the future,” Parikh had one standard reply to offer when he was asked if it was a plan to erase the Sikka legacy.
Interestingly, the new strategy that the company announced on Friday was mostly around digitalisation, something which it spelt out to certain extent during the Sikka regime and even before him.
Parekh said, as a part of the new strategy, the company would put a greater amount of focus to promote internal leaders into key roles than hiring external candidates to fill those. “As you can see, we are nominating internal leaders to drive the company which demonstrates that we have a huge leadership pipeline,” he said.
One of the major focus under former CEO Vishal Sikka was to hire external candidates, many of those from SAP where Sikka was previously working with, to fill key positions.
Infosys on Friday said that,t after the strategic review, it has initiated the process of identifying external buyers for its two subsidiaries Skava and Panaya, which the company believes are not perfect fits given the changing business requirements. Instead, the company would reinforce its focus on digital and core IT business including core-banking platform Finacle and other platforms such as Edge and Nia.
“Within that strategic review, we decided to initiate active interest in Panaya and Skava from external buyers because it did not fit all of the criteria we have today for scaling our businesses, given the condition we have for the business today,” M D Ranganath, Chief Financial Officer, said.
The company reclassified an impairment loss of Rs 1.18 billion ($18 million) with respect to Panaya in the consolidated profit and loss for the quarter and year ended March 2018, as it lined up the subsidiary for sale.
In February 2015, Infosys had acquired Israeli automation technology provider Panaya in an all-cash deal of $200 million (about Rs 12.44 billion). In the same year in April, the company announced its decision to acquire Kallidus Inc. (which operates under the brand name of Skava), a San Francisco-based digital experience solutions company, for a total consideration of $120 million (Rs 7.63 billion).
The acquisitions had kicked off a major crisis in India’s second largest IT firm when its co-founder NR Narayana Murthy raised a storm over lack of transparency in the deal, which was clinched by the company’s star CEO and MD Vishal Sikka.
On Friday, Infosys also said that it has entered into an agreement to acquire WongDoody Holding Company Inc, a US-based digital and creative customer insight agency for a total consideration of $75 million. This includes a contingent consideration and retention payouts.
The new regime made its intention clear to grow the digital business by announcing an acquisition in the space. The company also said, it would sell off two key acquisitions – Panaya and Skava -- which were made under the leadership of the previous CEO, and wrote down Rs 5.89 billion ($90 million) in the investment value of Panaya.
CEO & MD Salil Parekh tried to evade questions if the decision was more to bury the controversy saying it was part of the strategic review of the investments the company has made so far, and the products, solutions it has in its kitty. “My view is, I am looking at the future,” Parikh had one standard reply to offer when he was asked if it was a plan to erase the Sikka legacy.
Interestingly, the new strategy that the company announced on Friday was mostly around digitalisation, something which it spelt out to certain extent during the Sikka regime and even before him.
Parekh said, as a part of the new strategy, the company would put a greater amount of focus to promote internal leaders into key roles than hiring external candidates to fill those. “As you can see, we are nominating internal leaders to drive the company which demonstrates that we have a huge leadership pipeline,” he said.
One of the major focus under former CEO Vishal Sikka was to hire external candidates, many of those from SAP where Sikka was previously working with, to fill key positions.
Infosys on Friday said that,t after the strategic review, it has initiated the process of identifying external buyers for its two subsidiaries Skava and Panaya, which the company believes are not perfect fits given the changing business requirements. Instead, the company would reinforce its focus on digital and core IT business including core-banking platform Finacle and other platforms such as Edge and Nia.
“Within that strategic review, we decided to initiate active interest in Panaya and Skava from external buyers because it did not fit all of the criteria we have today for scaling our businesses, given the condition we have for the business today,” M D Ranganath, Chief Financial Officer, said.
The company reclassified an impairment loss of Rs 1.18 billion ($18 million) with respect to Panaya in the consolidated profit and loss for the quarter and year ended March 2018, as it lined up the subsidiary for sale.
In February 2015, Infosys had acquired Israeli automation technology provider Panaya in an all-cash deal of $200 million (about Rs 12.44 billion). In the same year in April, the company announced its decision to acquire Kallidus Inc. (which operates under the brand name of Skava), a San Francisco-based digital experience solutions company, for a total consideration of $120 million (Rs 7.63 billion).
The acquisitions had kicked off a major crisis in India’s second largest IT firm when its co-founder NR Narayana Murthy raised a storm over lack of transparency in the deal, which was clinched by the company’s star CEO and MD Vishal Sikka.
On Friday, Infosys also said that it has entered into an agreement to acquire WongDoody Holding Company Inc, a US-based digital and creative customer insight agency for a total consideration of $75 million. This includes a contingent consideration and retention payouts.
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