UPDATE 1-India's ITC tech arm buys US firm for $25 mln

(Adds deal size, background, details)

BANGALORE, Aug 19 (Reuters) - ITC Ltd (ITC.BO: Quote, Profile, Research), India's top cigarette firm, said on Tuesday its information technology arm had acquired U.S-based technology company Pyxis Solutions for about $25 million to boost growth.

ITC Infotech provides software and back-office outsourcing services to clients in industries from banking through to entertainment and it said the Pyxis buy would boost its activities in the United States.

"It adds to our capabilities and we would be able to leverage this to get new business, acquire new customers also grow engagements with existing customers," Sanjiv Puri, managing director of ITC Infotech, told Reuters in a phone interview.

Pyxis, which has about 100 staff, provides information technology solutions to banking, financial services and insurance companies in the United States to improve quality, save costs and boost data security.

"We certainly expect it to help us accelerate growth," Puri said, without giving details. "Their impressive roster of customers will further strengthen our presence in the U.S."

Indian software services firms are increasingly looking to acquire firms in overseas markets to diversify international presence and acquire new customers and technology skills.

ITC, 31.7-percent owned by British American Tobacco Plc (BATS.L: Quote, Profile, Research), has interests in technology outsourcing, retail and packaging, and is expanding a range of foods and personal care products to cut its dependence on cigarettes.

Shares in ITC, which has a market value of $16.5 billion, ended 2 percent down at 183.75 rupees in a weak Mumbai market. ($1=43.6 rupees) (Reporting by Sumeet Chatterjee; Editing by Charlotte Cooper)