Wipro Limited, an Indian multinational IT service exporter, has reportedly agreed to acquire Capco for USD 1.45 billion, in its biggest purchase yet. The decision was made to spur Wipro’s growth trajectory, which has been slowing down due to the tough competition posed by local rivals.
As per the agreement, the London-based Management entity Capco will bring in 5000 expert consultants which are likely to enable Wipro to add insurance, banking, and financial service clients to its wide customer portfolio.
These consultants are based across more than 30 locations globally and are supporting clients with their entrepreneurial approach, market insights, and focus on delivery excellence. Furthermore, Wipro claimed that the acquisition is expected to be completed by the quarter ending June 30.
Less than a year ago, Wipro hired Thierry Delaporte from Capgemini SE to help in regaining the market share it had lost to its adversaries, Infosys Ltd. and HCL Technologies Ltd. The Capco acquisition will reportedly draw in 30 new clients for the Bangalore-based software company.
A company representative from Wipro mentioned that although revenue and growth acceleration is the primary objectives of the acquisition, there are also cost synergies that will be realized post-integration. However, the buyout is subject to general terms and conditions, and regulatory sanctions.
Capco had recorded a revenue of USD 700 million in 2020, according to Wipro’s presentation. This is Wipro’s largest purchase since it had acquired Infocrossing Inc., in 2017 for USD 548 million.
With Azim Premji at its helm, Wipro was India’s third-largest software developer in terms of revenue and market value in 2019. According to credible sources, the company lost this spot a year later to HCL technologies.
During the 2020 financial year, Wipro had earned a revenue of USD 8.1 billion and netted USD 1.3 billion profit, with cash reserves of USD 5.2 billion.
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