Don’t miss the latest developments in business and finance.

Wipro to acquire Viteos Group for Rs 860 crore

Acquisition to strengthen its presence in capital market segment

Wipro to acquire Viteos Group for Rs 860 crore
BS Reporter Bengaluru
Last Updated : Dec 23 2015 | 5:56 PM IST
Wipro, India's third largest IT services provider, on Wednesday said that it has signed a definite agreement to acquire New Jersey-based back office services provider Viteos Group for a consideration of $130 million (around Rs 860 crore).

This make's the Bengaluru-headquartered company's second acquisition in this month and third one in 2015. Earlier this month, Wipro had agreed to acquire cellent AG, a German IT and consulting services provider for $77 million (around Rs 517 crore).

Founded in 2003, Somerset-headquartered Viteos Group provides business process as a service (BPaaS) to alternative investment management companies in the US, Europe and Asia. The company which employs over 400 associates, reported $26.5 million in revenues in FY2014-15. This makes the deal valuation close to five times of its FY15 sales, which is seen in the higher side.

"The company is valued at market cap to sales at 4.9xFY2015, which looks on the higher side; unless the company is accompanied by higher ROE's which can be sustained over a long term," equity research firm Angel Research's analyst Sarabjit Kour Nangra said in a note.

Wipro said the acquisition of Viteos which comes with proprietary platform, would enhance its presence in the Capital markets outsourcing segment, apart from bringing in new clients.

"The IT services industry is moving to an 'as-a-Service' model, and the future of BPS is going to be BPaaS. Our strategy is to invest in industry vertical platforms which will provide platform-based services to our clients in transaction/outcome-based pricing models," said Shaji Farooq, President & Chief Executive, Finance Solutions, Wipro Limited. "The acquisition of Viteos will further our strategy in the Capital markets domain."

In the past one year, Wipro is seen aggressively pursuing its inorganic growth strategy which is primarily focused on acquiring newer capabilities and platforms that can boost its drive towards non-linearity. Apart from cellent AG, Wipro in July this year had acquired Designit, a Denmark-based global strategic design firm for a consideration of around Euro 85 million (around $94 million or Rs 595 crore).

More From This Section

As on September 30, 2015, Wipro had a cash and cash equivalent reserve of Rs 10,048 crore.

"We are excited to be part of a trusted global leader and the transaction is a further recognition of our value and validation of our commitment to deliver excellence through our investments in people, process and technology," said Shankar Iyer, CEO & founder of Viteos Group.

Wipro's share price at Rs 555.80 was marginal up at the end of the day's trading on the BSE on Wednesday.

Also Read

First Published: Dec 23 2015 | 5:20 PM IST

Next Story