Wipro will acquire London-based Capco for US$1.45 billion (approximately Rs 1,570 crore). This will be India’s largest acquisition in history. The Indian IT giant seeks to become a “thriving and ambitious” company. Company, and shine in the acquisition. Higher income from banking and financial services.
Wipro announced the transaction on Thursday, saying that the acquisition will provide it with 30 new channels for large banks and financial customers, and strengthen its position in the banking, financial services and insurance (BFSI) field.
“…An important transformational acquisition. This is our largest acquisition ever. We will acquire Capco for US$1.45 billion (approximately Rs 10.57 billion). Capco will bring us more than US$700 million (approximately). (US$70 million). Wipro Chairman Rishad Premji said on the analyst conference call: “Income amounts to 51 billion rupees, and there are more than 5,000 consulting and domain experts from all over the world. “
He also pointed out that through this acquisition, Wipro will join a selected service provider alliance to provide customers with integrated and end-to-end consulting digital, cloud and IoT conversion solutions on a large scale.
“Banking and financial services are our largest sector in the world and our priority and growth areas…Capco will bring considerable scale to our BFSI business. This is a set of highly complementary service products that will combine consulting and consulting The business perfectly combines the field leaders’ expertise in scale, digital technology and operations. We believe this will drive accelerated growth.”
In the December quarter of 2020, the BFSI division accounted for more than 30% of Wipro’s IT service revenue, reaching US$2.071 billion (approximately Rs 15.09 billion).
Over the years, Wipro has followed an aggressive acquisition strategy to strengthen its business. During the 2020-2021 fiscal year, Wipro will cost 80 million U.S. dollars (approximately 5.8 billion rupees), 4C will cost 68 million euros (approximately 5.9 billion rupees), and IVIA will cost 80 million U.S. dollars (approximately 5.8 billion rupees). , Purchased shares of Eximus. 1.6 billion rupees), and Encore Theme Technologies, headquartered in Chennai, India, acquired 83.4% equity for a price of up to 950 million rupees.
This transaction will expand Wipro’s business to a large set of strategic customers who will form a unique and complementary relationship with the company’s existing customer base and provide a platform to leverage Capco’s many years of experience with CXO and several major customers. Deep relationships established by business leaders, Premji explained.
The transaction also occurred when global companies were betting on technology and increasing spending on digital to support growth during the pandemic.
“I have shared with you that you will see a bold Wipro, a more ambitious approach, a more ambitious approach, one that will take greater risks, and one that will not be afraid of rocking the car and make difficult appeals. Invest in deep technology. This acquisition is a great fit for this strategy and will pave the way for Wipro to lay a bold tomorrow.”
Wipro CEO Thierry Delaporte (Thierry Delaporte) said that the transaction was financed through internal cash and debt, and the acquisition still needs regulatory approval. It is expected to close in the quarter ending June 2021, subject to the necessary regulatory approvals and customary closing conditions.
After the transaction is completed, earnings per share (earnings per share) will increase from the third year.
Delaporte pointed out that there are five reasons why Capco is a great fit for the company.
“The acquisition of Capco helps us develop the global financial services business, which is our largest business area, which has grown from US$2.5 billion (approximately Rs 18.200 crore) to US$3.2 billion (approximately Rs 23,300 crore), with a strong Consulting business. Scale is crucial to our relevance to the market,” he said.
Delaporte added that the transaction will also help accelerate growth due to the complementary customer base between Capco and Wipro’s BFSI business and the synergy between the solutions provided by the two companies.
In addition, Wipro will be able to take advantage of Capco’s relationship with the key decision makers (CEO, etc.) of the board of directors, as well as the opportunity to obtain “extraordinary” talent from a London company.
Capco CEO Lance Levy said that the two companies will jointly provide customized end-to-end transformation solutions, which are now supported by large-scale innovative technologies, thus creating a new leading partner for the financial services industry .
Levy said: “We look forward to using the complementary capabilities and similar cultures of the two companies to drive industry change and provide exciting opportunities for our customers and our employees.”
Capco will continue to operate as an independent entity under Levy’s leadership, and Levy will report to Delaporte.
Delaport said: “To ensure that we leverage relationships, expertise and capabilities, we will provide ordinary customers with an integrated strategy and execution method. When we work in the model, we will learn together.”
He added that the acquisition will have a 2% impact on Wipro’s IT service profit margin in FY22, a large part of which is non-cash expenses.
Wipro stated in a regulatory document that customers will benefit from its capabilities in strategic design, domain and consulting, digital transformation, cloud, network security, data and IT services, and Capco’s deep expertise in banking, payment, and capital. Combination of domains and consulting capabilities market, insurance, risk and regulatory products.
Founded in 1998, Capco has cooperated with more than 100 customers and has established many long-term cooperative relationships with the world’s leading financial institutions. It has more than 5,000 consultants in more than 30 global locations in 16 countries. As of December 2020, the company’s consolidated revenue was US$720 million (approximately 52.5 billion rupees).
The document stated that under the competition laws of the United States, Germany, Canada, Brazil and Austria, the transaction will require antitrust approval.
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