IT services major Wipro on Wednesday said it would sell its Workday and Cornerstone On Demand business to Illinois-based Alight for cash consideration of up to $110 million.
Following the closing of its 10-year agreement that was announced in September last year, Alight and Wipro continue to explore additional strategic opportunities and possible alignment of portfolios based on their respective strengths, Wipro said in a regulatory filing.
"The divestiture agreement will result in approximately 350 employees in Wipro's Workday and Cornerstone On Demand teams moving to Alight," it added.
The transaction consists of business and employees in the US, the UK, Ireland, Portugal, India and certain other countries. Standalone revenue of the business was $49.7 million for 2017-18 (0.6 per cent of Wipro's consolidated revenue for the said fiscal).
In September last year, Wipro bagged an over $1.5 billion engagement from Alight Solutions LLC, its biggest deal till date. In July, the Bengaluru-based firm had partnered Alight Solutions to take over the latter's captive operations in India - Alight HR Services India - for a consideration of $117 million.
The filing said the transaction is for a cash consideration of up to $110 million, of which $100 million would be payable at closing. The balance $10 million would be a deferred consideration payable at the end of 12 months based on the achievement of performance targets.
"The transaction will expand Alight's capabilities and resources in HCM and financial solutions with Wipro's advisory, implementation and integration offerings, strengthening its position as a large implementation partner in the Workday and Cornerstone On Demand ecosystems," it said.
Wipro will continue with its focus and investment plans for the cloud applications and platforms space, including growing and expanding its Salesforce business under the Appirio brand, it added.
Wipro will also continue to support Workday's suite of solutions for application management, testing and integration services for its existing client base.
"This agreement will enable Wipro to sharpen its focus on key offerings where it has a leadership position in the market. We will continue to make significant investments to grow our cloud applications and platforms business," Wipro Chief Executive Officer and Executive Director Abidali Z Neemuchwala said.
In 2016, Wipro acquired the Workday and Cornerstone On Demand business as part of its Appirio buyout. The said business has multiple customers across the US, Europe, the Middle East and Africa.The transaction is subject to receipt of regulatory approvals and customary closing conditions and is expected to close during the quarter ending March 31, 2019.