BENGALURU (Reuters) – Wipro Ltd said on Thursday it would buy British consultancy Capco for $1.45 billion in cash, as the Indian software giant looks to boost its offerings for the financial services industry that generates the bulk of its revenue.
London-based Capco makes 96% of its revenue from Europe and North America, from where Indian IT services companies have traditionally won the most lucrative contracts.
Wipro and its rivals including Infosys Ltd and Tata Consultancy Services Ltd have become major global players, offering services spanning from back-office work for banks to social media content moderation as well as traditional technical support.
Capco has an experienced executive team and over 5,000 world-class business and technology consultants based across more than 30 global locations supporting clients through their expert insights, entrepreneurial approach and focus on delivery excellence.
This acquisition will make Wipro one of the largest end-to-end global consulting, technology and transformation service providers to the banking and financial services industry. By combining Wipro’s capabilities in strategic design, digital transformation, cloud, cybersecurity, IT and operations services with Capco’s domain and consulting strength, clients will gain access to a partner who can deliver integrated, bespoke solutions to help fuel growth and achieve their transformation objectives.
Capco will give Wipro access to 30 new large banking and financial clients and make the Indian firm one of the largest end-to-end consulting and technology service providers to that industry globally, Wipro said.
Banking and financial clients account for nearly a third of Bengaluru-headquartered Wipro’s revenue, the largest from any industry.
The deal also comes as businesses globally spend more on digital and other back-end services to support remote work during the pandemic.
Wipro said the Capco acquisition would reduce its IT services earnings before interest and taxes (EBIT) margins by about 2% in the first year. Capco will begin adding to Wipro’s earnings per share from the third year, it added.
Wipro said it expects the deal to close in the quarter ending June.
(Reporting by Sachin Ravikumar in Bengaluru; Editing by Ramakrishnan M.)