Wipro buys US firm for $600m
posted in Outsourcing News and Top Outsourcing deals |Source:timesofindia.indiatimes.com
Wipro Technologies is making its biggest ever acquisition. It is buying New Jersey-based Infocrossing for $600 million (Rs 2,460 crore) in an all cash deal. It has signed a definitive agreement with Infocrossing to acquire the latter paying $18.70 (six months average price) per each of its fully diluted 32 million shares, with 13% premium.
Infocrossing focusses on infrastructure management, enterprise application and business process outsourcing services. The company that employs 900 people in five different data centres — New Jersey, California, Georgia, Arizona and Nebraska — provides end-to-end remote infrastructure management solutions like server management, mainframe outsourcing, network management and security services to around 200 clients. During the fiscal ended March 3I, 2007, it posted revenues of $229 million with a net profit of $8.5 million. It has net assets of $300 million.
Wipro president Suresh Vaswani said the acquisition will be conducted through a tender offer, which will follow the merger of Infocrossing with Wipro subsidiary, Wipro Inc. The tender offer is subject to a number of customary closing conditions, including regulatory approvals, and is expected to be completed by December while it is expected to reflect on revenues from the fourth quarter onwards.
Wipro has made a series of small acquisitions around the world in the past few years to fill gaps in its portfolio, a process that Wipro chairman Azim Premji has called the ‘string of pearls’ strategy. But the Infocrossing acquisition is far bigger than any so far.
“The acquisition will help fill gaps in the managed infrastructure services space thereby creating additional markets for Wipro,” said Vaswani.
“This will also deepen our presence in the US. This acquisition will broaden our data centre and mainframe capabilities and position us uniquely in the remote infrastructure management space, which is a $70 billion market, a major chunk of the total IT infrastructure market of $150 billion.” It will also strengthen Wipro’s healthcare and BPO businesses in the US.
