According to published reports, Indian outsourcer Infosys BPO has inked an agreement to takeover McCamish Systems. Infosys BPO is a subsidiary of Infosys Technologies.
McCamish Systems is based in Atlanta and its major focus is on the financial services market and insurance, reports PC World. According to Infosys, the contract covered an initial payment of $38 million along with an additional $20 million should McCamish achieve further lucrative targets down the road. The transaction will be completed by the end of the year after certain conditions are met, said Infosys.
CEO of Infosys BPO, Amitabh Chaudry said in a statement, the takeover will enable clients to have access to Infosys BPO technology along with McCamish products. This results in a better package as far as delivery to the client is concerned. Additionally, McCamish will bring clients from insurance and financial services to Infosys and provide a U.S. service delivery base for the No. 2 outsourcer in India.
In total, Georgia-based McCamish has 39 clients and works with approximately 260 employees out of Atlanta. In the fiscal year ending in 2008, the company reported revenues worth $38 million.
Partner at Technology Partners International (TPI), an outsourcing consulting firm - Siddharth Pai - noted that a consolidation trend is likely in the outsourcing sector since valuations are down. In addition, big outsurcers are anticipating an increase in business. He added that the major benefit for Infosys from this acquisition is the technology platform brought over for McCamish. This could improve Infosys previous model based on ‘time and materials’ to one that is based on pricing. This would translate to a switch from a model based on employee time in order to obtain specific results.
Pai explained that Indian outsourcers are now looking into non-linear growth when it comes revenue. This implies less dependency on addition of staff. Nonetheless, outsourcers in India are expecting the decline in business to turn around since the recession. As a result, there is a general trend in hiring more staff and expanding base units in various strategic loactions.
Currently, Infosys BPO has operations in China, Philippines, the Czech Republic, Thailand, Poland, Brazil, and Mexico. The company provides jobs for 16,400 people. In the financial year closing March 31 of this year, Infosys closed its revenues with an astounding $316.2 million.
In a related story, Infosys BPO said it will add 2,000 employees, setting a target rate for March 21, 2010. Having acquired a delivery center in close proximity to U.S. clients is a definite plus for Infosys.