Sale of Panaya announced in Infosys Q4 results
In Infosys's fourth quarter results, the Indian IT consulting firm has announced that following a strategic review of its portfolio of businesses, it is in the process of identifying and evaluating potential buyers of Panaya, the Israel-based provider of application delivery and testing solutions. Skava, provider of an e-commerce platform based on cloud microservices architecture, will also be sold.
During a recent press conference, Infosys CEO Salil Parekh explained that there are four pillars to the company's strategy, including agile digital scaling. "Within our strategic review, we decided to initiate active interest in Panaya and Skava from external buyers because they did not fit all of the criteria we have today for scaling our businesses," he said.
In a statement, Infosys said that on reclassification, an impairment loss of $18 million in respect of Panaya had been recognised in the consolidated profit and loss for the quarter. The corresponding write down in the investment value of Panaya in the standalone financial statements of Infosys is $90 million, less than half of what Infosys acquired the company for.
The $200m purchase of Panaya by Infosys has not been without controversy. Some Infosys shareholders complained about severance payments made to the former Panaya CFO following the 2015 deal. However, following an investigation, Infosys later stated that it had found no substance in accusations of wrong-doing.
Commenting on the announcement, Jake Klein, CEO of Panaya, said: "We welcome Infosys’ decision as it enables us to dramatically accelerate the execution of our product strategy and vision as a standalone entity. It will very much be business as usual for Panaya throughout this transition as Infosys remains 100% committed to our financial stability and success.”
Klein said that the company has delivered record results in FY 2018, and over the last 18 months has increased its market share in the application testing market.
Completion of the sale is anticipated by March 2019.