Infosys acquires SaaS company Panaya

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Infosys announced on Monday the company is acquiring the Israel-based automation technology provider Panaya Inc. The terms include $200 million in cash with the deal being closed before March 31, 2015, once customary closing conditions are satisfied.

Infosys, India’s third largest software services company by revenue, has generally been conservative with its acquisition strategies, as Financial Express notes. This makes us wonder what so appealing about Panaya that the company saw it as a valuable piece to its overall strategy? Why the sudden turnaround in philosophy?

“The acquisition of Panaya is a key step in renewing and differentiating our service lines. This will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients,” said Sikka in a press release.

The company also indicated the purchase of Panaya will help it move forward with its “Renew and New” strategy, allowing it to leverage automation, innovation and artificial intelligence to bring “automation to several of its service lines via an agile SaaS model.”

Busy days at Infosys

Over the past year Infosys has been through a lot of change. Founder NR Narayana Murthy stepped down as executive chairman in June; CEO S.D. Shibulal, also a founder, resigned in July. Murthy had come out of retirement in 2013 to try and aid the struggling company as it experienced decreased revenue and lost business to competitors

Shibulal was replaced by Vishal Sikka to head the company. Sikka is the fifth CEO the company has had it since its inception in 1981. He is also its first external hire to serve as CEO. Over the past few years the company has seen its challenges. Its current “Renew and New” strategy is a vision created by Sikka to transform the company and “restore” its former glory.

The purchase of Panaya is the first acquisition made under Sikka’s leadership as it pursues software-driven B2B solutions.

What you need to know about Panaya

Launched in 2005, Panaya is privately-held enterprise resource planning (ERP) software company. Adding agility to ERP systems, the company works with one-third of the Fortune 500 companies to provide solutions. Clients include Coca-Cola, Mercedes-Benz, Unilever and General Motors, to name a few, all of which use its CloudQuality SaaS suite.

Apparently, it’s the company’s CloudQuality software-as-a-service (SaaS) suite that caught Infosys’ eye.

“We are excited about leveraging Infosys’ global reach, service footprint and broad customer base to deliver compelling, simplifying, value to clients,” said Doron Gerstel, CEO of Panaya, about the acquisition. “I am confident this integrated proposition will uniquely position Infosys as the services leader in the enterprise application services market.”

Other SaaS news

As businesses look to fill their technology needs, they often turn to SaaS companies to provide these solutions to free up their own resources. Like Infosys, acquiring this talent can help improve their own services. Other February SaaS acquisitions include HealthStream’s acquisition of HealthLine Systems in an $88 million cash deal. SS&C Technologies added rival Advent Software to its portfolio in a $2.7 billion deal.

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Leigh Goessl

Leigh Goessl

Leigh Goessl has been writing on the web since 2007. She currently is a freelance writer and enjoys writing about business and tech topics. Leigh's previous work includes ghost writing for a a legal website, a major online college and an education website. Her education includes an MBA with a concentration in information security.