Information technology services major Wipro will acquire the IT business of Canadian corporation ATCO for $195 million (Rs 1,176 crore). The deal comes bundled with a 10-year outsourcing contract of $1.12 billion (Rs 6,576 crore).
“Wipro and ATCO have signed a series of master services agreement under which Wipro will provide the complete suite of IT services to ATCO. The arrangement is projected to result in revenues of over $ 112 million to Wipro annually up to December 2024,” Wipro said in a statement.
About 500 of ATCO’s staff will become Wipro employees. “This is an outsourcing deal with significant amount of transformational element,” said Anand Padmanabhan, chief executive, energy, natural resources and utilities. “We have traditionally had a strong position in the utilities space in Europe and this engagement provides momentum to our business in Canada and Australia.”
ATCO I-tek, the IT arm which will be part of Wipro, has presence in Canada and Australia.
Alberta-based energy, utility and logistics company ATCO will focus on its core business.
The deal is similar to one that Wipro’s IT rival Infosys cut in 2007 with Royal Philips. Infosys acquired Philips’ BPO operation in India for $28 million and added 1,400 Philips employees to its rolls, and got a seven-year $250-million contract as well.
Philips recently extended the contract for another five years.
Shares of Wipro gained 1.8% to end Friday at Rs. 547.7 on BSE.