Infogain looking at buys to enhance customer experience capabilities

Mergermarket, a leading online portal, explores Infogain’s strategic initiatives to enhance its customer experience capabilities and future goals.

Read the article titled “Infogain looking at buys to enhance customer experience capabilities, CFO says", which features an exclusive interview with our CFO, Kulesh Bansal as he discusses the company’s upcoming growth plans and tactical pursuit of acquisition targets to boost Infogain’s capabilities.

Infogain, an Apax-owned customer experience firm for large enterprise businesses, is actively looking for acquisition targets that can add to its capabilities, said CFO Kulesh Bansal.

The Los Gatos, California-headquartered firm is focusing on companies operating in the Adobe Ecommerce, Databricks and Snowflake platforms with offerings for Infogain’s North American clients, Bansal said.

Firms with service teams in the US, India, Eastern Europe and Latin America would also be of interest, he said.

It is looking to acquire firms with USD 20m-USD 50m in revenue or companies with headcounts of 350-1,000, Bansal said.

Targets should be profitable or generate gross margins in the high 30% range, the executive said.

Infogain seeks firms with cultural alignment whose managers have sterling business reputations, Bansal said. “We want founders with impeccable integrity and transparency,” he said.

The company is in M&A talks with three to five firms at any time and could close its next deal this year, Bansal said.

Companies in Infogain’s sector tend to trade at 2x revenue or 12x-15x EBITDA, he said.

In the last six years, Infogain has shifted from a data engineering company focused on backend support to an “experience design” firm that works in the cloud and possesses a mature data analytics practice.

Its most recent acquisition was of New Jersey-based Impaqtive.

Infogain’s revenue was about USD 100m nine years ago as a backend engineering firm with about 500 clients.

Bansal wouldn’t disclose current financials but said the company has narrowed its client base to about 110 and has grown revenue more than 3x in the last six years. About 85% of customers are in North America, with the rest in Europe, the Asia Pacific, and the Middle East, Bansal said. The firm has 5,500 employees.

Infogain serves customers with at least USD 1bn in revenue, Bansal said. 18 of its clients are Fortune 500 companies, he noted.

The company expects more than 90% of revenue will come from existing customers, with about 5% from new customers and the rest from M&A, he said.

Infogain expects to maintain about a 20% compound annual growth rate, the executive said.

Apax acquired the firm in June 2021. It continues to help with M&A and has no immediate exit plans, Bansal said.

Competitors include Accenture, Capgemini, Cognizant, TCS, GlobalLogic, and other large IT companies operating in the customer experience niche.

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