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Infy to buy Citi stake in Progeon

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All-cash deal worth Rs 518 crore

Going forward
Infy plans to integrate BPO services
Progeon expects to grow at 45-50 pc
Looks to raise headcount by over 3,000

Bangalore , April 20

Infosys Technologies said on Thursday that it will buy out Citicorp International Finance Corporation's 23 per cent stake in its BPO subsidiary, Progeon, for Rs 518 crore ($115.13 million) in an all-cash deal.

Infosys has signed an agreement with Citi in this regard and the transaction is likely to be completed by July 2006, said a company release.

Citi's 23 per cent stake on a fully diluted basis in Progeon amounts to 8.75 million shares.

Progeon, a majority owned subsidiary of Infosys, was set up in April 2002.

It was among the top 10 third-party BPOs in India, according to Nasscom 2004-05 rankings.

Infosys officials said that the company would integrate the BPO services under the `One Infy' offering once the buy-out is complete, and may subsequently phase out the Progeon brand.

The `One Infy' integrated offerings would include consulting, technology services, and BPO services.

The Progeon CEO, Mr Amitabh Chaudhury, had recently told Business Line that investing further in brand Progeon and maintaining it separately did not make any sense once the buy-back was completed.

"Infosys is a much stronger brand and clients are increasingly looking forward for the integrated offerings."

Progeon accounted for four per cent of Infosys's revenues in 2005-06 and has over 7,000 employees.

It clocked revenues of $85 million with profits of $21 million during the year gone by. It added one new client during the fourth quarter to take its total client base to 22.

Mr Chaudury said that Progeon expects to grow at 45-50 per cent and add over 3,000 people in the current fiscal.

Related Stories:
Progeon brand on its way out
Progeon buy-out unlikely to hit Infosys earnings

More Stories on : Outsourcing | Mergers & Acquisitions | Software | Infosys Technologies Ltd

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