The investment arm of Indian IT services giant Infosys will complete a $37 million buy-out of Australian procurement firm Portlands Group in the next few days.
The deal, signed in late December, will be finalised in early January, subject to certain undisclosed closing conditions being met.
Infosys has very rarely acquired other companies. The purchase of Portland Group marks only its fourth purchase in its 32 year history.
Founded in 1999, Sydney-based Portland Group was originally a procurement technology company. It has since expanded into cost-reduction consultancy. Its clients include businesses such as beverage giant Pepsico and Australian coal seam gas company QGC.
Following the completion of the buy-out, Portland Group will keep its current name and Australian management team, and said in a statement it will continue to operate as an independent company.
Chief executive Gavin Solsky and managing director Dave Gardiner will stay with the business.
Portland Group says joining with Infosys would place it in “a highly compelling proposition that does not currently exist in the sourcing and procurement services market in Australia”.
“Our recent focus has been on increasing our capabilities by developing deep category and functional procurement expertise in areas such as logistics, property, IT, marketing, procure to pay and engineering and capital projects.”
“Through joining with Infosys we will further expand our capabilities to include a lower cost global footprint, increased technology enablement of our services and access to transactional procurement services that we do not currently provide.”
“This will allow us to offer our customers a truly integrated and globally competitive solution to deliver procurement benefits in the most effective and efficient way possible.”
The statement added that being part of Infosys would allow the company to greatly scale its services, leveraging the 1,000-strong Infosys sourcing and procurement team.
“This will further improve our ability to service many companies that are tackling large infrastructure and resource projects in a highly constrained environment for sourcing and procurement skills.”
The CEO and managing director of Infosys’ investment arm Infosys BPO, D. Swaminathan says Portland Group’s expertise in strategic sourcing and category management services would complement Infosys global sourcing and procurement capabilities.
“Further in a dynamic marketplace such as Australasia this will strengthen the top-end of our service offering in the strategic sourcing and category management functions.”
“This will also enhance the competitiveness, spread of offerings and global reach for our clients.”
Portland Group posted revenue of $31.3 million last financial year, and employs 113 staff. It has five offices across Australia and New Zealand, and one in Shanghai.
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