India's third largest IT services provider Wipro Ltd has invested $809,690 (about Rs 5.21 crore) in Drivestream Inc to increase its stake in the US-based management and IT consulting firm.
In the latest transaction, Drivestream issued 19,679 preferred shares and 27,865 common stocks to Wipro to convert an optional convertible note issued in March 2016, the Indian firm told the stock exchanges. Wipro will now have a 26.1% stake in Drivestream.
“Wipro’s global customer base in the enterprise market coupled with Drivestream’s established credentials of successful cloud implementation in the mid-market will offer unparalleled value to the customers,” the company said in a statement.
Wipro had agreed to acquire a minority equity stake in Drivestream for $5 million in March 2015. The investment was routed through Wipro’s $100-million corporate venture fund Wipro Ventures.
Drivestream, which was founded in 2001, specialises in Oracle-managed cloud services, application implementation, upgrades, enhancements and ongoing support. The company has a workforce of 73 employees in the US.
Its overall revenue had dropped to $20.5 million in 2016 from $23 million in 2015. Its cloud revenues, however, increased to $14.5 million from $13.1 million during the period.
Wipro has made a string of acquisitions in the US and Europe in recent times. Last year, the IT major had acquired two US companies, including Appirio Inc. for $500 million and Healthplan Services Inc. for $460 million.
Wipro’s biggest acquisition till date remains the 2007 purchase of US IT firm Infocrossing for about $600 million.
Other Indian IT majors, including Infosys and HCL Technologies, have also been snapping up overseas assets.
In April, HCL had agreed to acquire US-based Urban Fulfillment Services LLC for up to $30 million.