IT services major Wipro on Thursday said the acquisition of Capco , a management and technology consultancy firm for $ 1.45 billion will help it grow its global financial services business to $3.2 billion from the current $2.5 billion.
This is the software company's biggest acquisition so far.
Bengaluru-based company today announced that an all-cash acquisition of London-headquartered Capco, which offers management and technology consultancy to the banking and financial services industry.
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Wipro said the company will become one of the largest providers of integrated, end-to-end consulting, digital, cloud and IT transformation services at scale with the acquisition, which is expected to close in the June quarter.
Rishad Premji, chairman of Wipro, said during an analyst call that the acquisition reflects a 'bolder' Wipro, "BFSI (Banking, financial services and insurance) is high priority for us. Capco will bring Wipro scale in BFSI business. The acquisition will expand our presence to large strategic customers and it will help us leverage deep relations with business leaders of large customers."
"I had said earlier that you will see a bolder Wipro. This acquisition fits well into that strategy," he added.
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Wipro CEO Thierry Delaporte laid down the rationale for the acquisition in five points:
1. "It will help us grow our global financial services to $3.2 billion from $2.5 billion.
2. Growth acceleration in BFSI.
3. Highly complementary service offerings in BFSI.
4. Wipro can leverage deep relations with CXOs.
5. Exceptional talent to be onboarded through acquisition," Delaporte listed out.
Wipro will onboard 5,000 consultants of Capco as part of the deal.
Founded in 1998, Capco is a leading global management and technology consultancy firm to the global banking and financial services industry. It works with more than 100 clients, has over 5,000 consultants based in more than 30 global locations across 16 countries.
The company saw revenues of $720 million in 2020.
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"Capco has been in fortunate position in last seven years to position itself as alternative to large consulting brands," Capco chief executive officer Lance Levy said on the call.
"It has become clear that clients are asking not only for advise on strategy but to take them through full transformational journey through technology at scale. This is the opportunity for Wipro and Capco to create new market leader for financial services," Levy added.
Delaporte said the acquisition will affect the company's IT services margins by two percent in FY22. Wipro has been on a shopping spree, and had acquired Eximus, Encore, 4C and IVIA this fiscal.
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Some of Wipro's largest deals include Infocrossing (Acquisition for $600 million in August 2007), Appirio (Acquisition for $500 million in October 2016), HealthPlan Services (Acquisition for $ 460 million in February 2016).
