Wipro Ltd, India’s third-largest software services exporter, has agreed to sell its hosted data centre business to US-based hybrid IT services provider Ensono for $405 million (Rs 2,626 crore).
Wipro will also invest $55 million to take a minority stake in Ensono as part of the deal, the Bengaluru-based company said in a stock-exchange filing. Wipro will get a board seat in Ensono, the US company said separately.
The acquisition is subject to customary closing conditions and regulatory approvals and is likely to close by the end of June.
Wipro said it will sell eight data centres and transfer 900 employees to Ensono.
The hosted data centre services business is one of three businesses that became a part of Wipro when it acquired Infocrossing Inc in 2007. The other two businesses — Medicare & Medicaid services in the health insurance space and ERP implementation services — have been integrated with other Wipro businesses and are not part of this divestment.
The Indian IT firm had bought Infocrossing for almost $600 million in what remains its biggest acquisition in dollar terms.
“As we embrace our strategy of focusing on newer digital areas of spend, our strategic investment and partnership with Ensono will enable us to remain committed to meeting the hosted data center services requirements of our customers,” Kiran Desai, senior vice president of global infrastructure services at Wipro, said in a media statement.
Previously, in December 2016, Wipro sold its EcoEnergy division to a unit of UTC, Climate Controls and Security in a $70 million deal as part of its effort to sharpen its focus on IT services, it said at that time.
Wipro and Ensono have signed a long-term agreement to “jointly address hybrid IT requirements of Wipro’s new and existing enterprise customers,” the US firm said.
For the Delawar-based Ensono, this will be its third acquisition in less than three years and will help it double its revenue to $550 million.
“We are increasing our geographic presence by expanding our data center operations in Germany, UK and the US, as well as establishing an operational presence in India,” said Jeff VonDeylen, CEO, Ensono.
Ensono is a portfolio company of Charlesbank Capital Partners and M/C Partners.
Jefferies LLC acted as the exclusive financial adviser to Ensono for this transaction. Credit Suisse Securities (USA) LLC acted as the sole financial adviser to Wipro.
Goodwin Procter LLP and Ropes & Gray LLP acted as legal advisers to Ensono, and Hughes Hubbard and Reed LLP (for the US), and DLA Piper (for Europe) were legal advisers to Wipro on this transaction, according to the media statement.
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