ITC Info buys US firm for Rs 105 cr

ITC Infotech, an IT services firm and a wholly owned subsidiary of tobacco-to-hotels conglomerate ITC Group, has acquired New York-headquartered Pyxis Solutions – a provider of quality assurance and testing services – for $25 million (around Rs 105 crore). This is its first all-cash acquisition in the last eight years, funded through internal accruals.

Pyxis, which has a rich clientele of major investment banks including Goldman Sach, Credit Suisse and Lehman Brothers, will come to ITC Infotech’s fold with a team of 100 professionals with key delivery centre in the US, and a small offshore presence in Pune. ITC Infotech which netted a revenue in excess of Rs 400 crore in FY08, also has a testing practice with a team of 300 odd people.

According to the company, the acquisition of Pyxis will take the company closer to its clients’ locations, and help in further building the testing practice within ITC Infotech by leveraging Pyxis expertise in the banking and financial services space.

“This strategic acquisition is an important milestone for us. It is a manifestation of our commitment to deepen capabilities and create enduring value for our customers,” said Sanjiv Puri, MD, ITC Infotech. “Pyxis Solutions brings on board differentiated capabilities and expertise which compliment our service offerings. Their impressive roster of customers will further strengthen our presence in the US,” he added.

Privately-held Pyxis Solutions was incorporated in 2000. Promoted by co-founders Amar Duggal and Greg Brener, the company’s revenue in the previous fiscal year was in the range of $15-20 million. Post-acquisition, Pyxis will become a wholly owned subsidiary in the US. The key management of the company including Duggal and Brener will continue to work in their respective positions as CEO and COO of the company.

According to Gartner, the market for testing services stands at $13 billion. About 50 per cent of the testing works are being outsourced at the moment, thus driving the growth of the industry.

Puri said the company would continue to explore acquisition opportunities with deep skill sets in the sectors or verticals that ITC Infotech focusses on. “Our plans are to build capabilities internally and also acquiring companies to add on to it. We are in discussion with potential companies for possible