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Wipro to acquire US cloud services firm Appirio for $500 mn

21 October, 2016

Wipro Ltd has agreed to buy US-based cloud services company Appirio Inc. for $500 million (Rs 3,340 crore) in cash, as India’s third-largest software services exporter continues to strike acquisitions overseas to strengthen its offerings in new technologies.

The acquisition will create one of the world’s largest cloud transformation practices, Wipro said in a stock-exchange filing.

Appirio was set up in 2006 and has 1,250 employees across its headquarters in Indianapolis and offices in San Francisco, Dublin, London, Jaipur and Tokyo.

This is the fourth acquisition by Wipro, led by billionaire chairman Azim Premji, since July last year and the second-biggest ever.

In February, Wipro agreed to purchase US-based HealthPlan Services, a business-process-as-a-service (BPaaS) provider, for $460 million.

The company had in December agreed to acquire US-based Viteos Group, a BPaaS provider for the alternative investment management industry in the US, Europe and Asia, for $130 million in cash. It later called off the deal.

Also in December, Wipro said it would acquire German IT consulting firm Cellent AG for €73.5 million (about Rs 518 crore, or $78 million then). In July last year, Wipro Digital, the digital business unit of Wipro, agreed to buy Danish strategic design firm Designit for €85 million ($94 million then).

Wipro’s biggest acquisition till date is the 2007 purchase of US IT firm Infocrossing for almost $600 million. It has acquired several smaller firms since then, including Opus Capital for around $75 million in 2013. In 2014, Wipro acquired ATCO I-Tek, an IT business of Canadian firm ATCO, for $195 million. The company has also invested in several tech ventures and startups.

Bengaluru-based Wipro is not the only Indian IT firm snapping up overseas assets. Infosys, its cross-town rival and the No. 2 software services exporter, made three major acquisitions in 2015. It agreed to buy Panaya Inc for $200 million in February last year, and sealed a $120 million deal to buy m-commerce enabler Kallidus in April. In October, Infosys agreed to pay $70 million for US-based Noah Consulting.

Wipro, however, has been more aggressive than Infosys and has now spent $1.3 billion in acquisitions over the past 15 months.

Appirio deal

The acquisition is the second by Wipro since Abidali Neemuchwala took over as its CEO in February.

“Appirio and Wipro are coming together to unlock transformational synergies in the applications space and help enterprises create new business models,” Neemuchwala said.

Wipro said it will consolidate its existing cloud applications practices of Salesforce and Workday under the Appirio brand and structure. Chris Barbin, Appirio’s CEO, will lead the expanded business.

Appirio’s acquisition will also bring to Wipro’s fold the Topcoder crowdsourcing marketplace that connects more than a million designers, developers and data scientists across the world with customers.

The US cloud services firm’s revenue is growing at a fast clip. It posted revenue of $196 million in 2015, up from $178 million the year before and $137 million in 2013.

The transaction is subject to regulatory approval and is likely to close in the current quarter, Wipro said.

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Wipro to acquire US cloud services firm Appirio for $500 mn

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