The deal is an all-cash one and will be funded through internal accruals and debt. The acquisition is subject to customary closing conditions and regulatory approvals and is expected to close in the June quarter.
Rishad Premji, chairman, Wipro, said: “With this deal we are joining select service providers that bring end-to-end consultative, digital cloud, and IT-driven solutions at scale to our customers. This deal will bring scale to Wipro’s BFSI (banking financial services, and insurance) play,” said Premji.
Chief Executive Officer (CEO) Thierry Delaporte said: “This deal is a growth accelerator for Wipro.
We have a complementary customer base and it gives an immediate access to 30 BFS (banking and financial services) clients who can significantly enhance access to industry solutions.”
Lance Levy, CEO of Capco, said: “We are excited to join our new colleagues at Wipro.
Together, we will offer bespoke transformational end-to-end solutions, now powered by innovative technology at scale, to create a new leading partner to the financial services industry. We look forward to leveraging the complementary capabilities and similar cultures of both companies.
While analysts tracking the company said it was a bold move, many said this might be an attempt to bolster its revenue.
“Capco is a good addition for Wipro.
It strengthens Wipro’s financial services business and adds scale to its UK and European operations. Both have been targeted by the Wipro chief executive officer as areas to be strengthened. It shows that under him Wipro is taking an acquisitive posture and is likely to be adding more scale and capability through acquisition over the next year or two,” said Peter Bendor-Samuel, chief executive officer, Everest Group.
The company said this acquisition would make Wipro one of the largest end-to-end global consulting, technology and transformation service providers to the banking and financial services industry. It will add revenues of $700 million and will see 5,000 technology and business consultants joining Wipro.
“A consultative approach enables providers to complement the capabilities required by customers in creating a road map for their business. The percentage of deals coming from traditional routes is declining and hence providers will have to engage early in helping customers across various verticals to support their journey and this can translate into new businesses. Wipro’s acquisition to complement consulting organisations can help it drive better non-linear growth and become a transformational player,” said D D Mishra, senior research director, Gartner.
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