L&T Infotech acquires Citigroup's Canadian IT unit

L&T Infotech, the information technology arm of engineering major Larsen & Toubro, has acquired Citigroup’s Canadian IT outsourcing arm, Citigroup Fund Services Canada (CFSC). The deal, say senior officials, is around $40 million (Rs 180 crore). L&T takes on board 200 employees, of which 90 per cent are IT professionals.

This comes at a time when the industry is witnessing an increase in merger and acquisition (M&A) activity. However, L&T Infotech has been fairly quiet in the M&A space after it failed to acquire scam-hit Satyam Computer Services in 2009.

CFSC is a provider of integrated securities and fund services to Canada’s investment fund industry. It was part of Citi’s Global Transaction Services business, which offers integrated cash management, trade, and securities and fund services to entities round the world. Sudip Banerjee, CEO of L&T Infotech, could not be spoken to, as he was out of the country. A senior official said, “The acquisition is fairly small, but it gives the company a good presence in Canada and also adds to its banking and financial offering.”

For L&T Infotech, BFSI (banking, financial services and insurance) and energy contributes around 30 per cent and manufacturing around 20-25 per cent of revenue. It also has presence in media and entertainment, healthcare, and telecom.

In an earlier conversation with Business Standard, Banerjee had said the company’s inorganic (growth from within) strategy would be based on three initiatives — geography, new service lines and getting key people in.

As part of the acquisition, L&T Infotech will be Citigroup’s exclusive provider of transfer agency technology services in Canada.