L&T Infotech places $330-million bid to buy Polaris Financial Technology’s IT services unit

Infotech Lead India: L&T Infotech has placed a $330-million offer to buy Polaris Financial Technology’s IT services unit, while Tech Mahindra’s bid is more than $350 million.

Times of India on Friday reported that both the offers have come below the asking valuation of $400-450 million.

Both L&T Infotech and Tech Mahindra have also shown interest to buy MphasiS from Hewlett-Packard.

Wipro and Infosys too are contenders for Polaris after founder Arun Jain and an affiliate of Citigroup, which holds about 20 percent stake, decided to sell the IT services business that accounts for more than 70 percent of the company’s revenues.

Bidders like Wipro already have a large outsourcing business from the Citigroup, while others like Infosys are bidding to win a bigger slice of Citigroup contracts. The American bank is expected to offer a multi-year business contract to the chosen bidder.

For L&T, Polaris presents an opportunity to scale up its IT business after it lost Satyam to the Mahindra Group four years ago. L&T is aiming at an annual revenue of $2-3 billion from its infotech arm.

Tech Mahindra is looking to boost its revenue from financial services clients and hence eyeing Polaris’ unit. Polaris, the 11th largest software exporter from India, recently split its businesses into two units, services and products to facilitate value unlocking in the enterprise.

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