Nine months after putting them on the block, homegrown IT major Infosys Ltd has decided against selling three subsidiaries that were acquired during former chief executive Vishal Sikka’s tenure.
Panaya, Kallidus and Skava have been de-classified as “held for sale”, the Bengaluru-based company informed stock exchanges on Friday after reporting its third-quarter earnings.
Infosys co-founder NR Narayana Murthy had raised question marks over the acquisition of Israeli firm Panaya in the build-up to Sikka's resignation in August 2017.
“During the quarter ended December 31, 2018, based on evaluation of proposals received and progress of negotiations with potential buyers, the company concluded that it is no longer highly probable that sale would be consummated by March 31, 2019,” Infosys said on Friday.
The company said it now plans to repurpose Skava’s micro services-based business and refocus Panaya’s suite of products. Skava and Kallidus are collectively referred to as Skava.
Infosys said upon de-classification, it has recognised additional depreciation and amortisation expenses of $12 million and a reduction of $65 million in the carrying value for Skava.
Infosys had in April last year announced that it had initiated the evaluation of potential buyers for the firms after a “strategic review” of its portfolio of businesses.
The company had bought m-commerce enabler Kallidus, which operated under key product Skava, for $120 million in 2015.
Infosys had announced the acquisition of the Hod HaSharon, Israel-based information technology and cloud-based quality management services firm Panaya in February 2015.
The $200 million Panaya deal was Infosys’ second biggest M&A ever, after the firm had bought Lodestone for $350 million in 2013.
The Panaya deal led to allegations that Infosys executives had personally benefitted from it and irked the company’s co-founder Murthy and other promoters.
The allegations drew two internal investigations besides an international probe by law firms between October 2015 and August 2016. None of the investigations found any irregularities, Infosys had said.
However the squabbles escalated, prompting Sikka to resign from his position in August 2018. Former Capgemini executive Salil Parekh took over as CEO in January last year.
The controversy had also resulted in resignations of two other senior Infosys executives, Ritika Suri and Sandeep Dadlani. Suri was Infosys’ large deals head, who had overseen the Panaya acquisition.