Wipro to buy Citi unit for $127 mn
Wipro Ltd, the country’s third-largest software services provider, has agreed to buy Citi Technology Services Ltd for about $127 million (Rs 621.5 crore) in cash.business Updated: Dec 23, 2008 20:40 IST
Wipro Ltd, the country’s third-largest software services provider, has agreed to buy Citi Technology Services Ltd, an IT services arm of the US-banking giant Citigroup, for about $127 million (Rs 621.5 crore) in cash.
As part of the deal, Citigroup will source services worth at least $500 million (Rs 2,446.8 crore) over the next six years from Wipro. Citi Technology Services’ revenues are expected to be approximately $80 million (Rs 391.5 crore) in 2008. Apart from strong competencies in infotech services, Citi Technology Services has expertise in cards, capital markets and corporate banking, according to a statement issued by the company.
Citi Technology Services, based in Mumbai and Chennai, mainly provides software and solutions to the banking industry and has 1,650 employees, Wipro said in a statement.
The buy comes after HCL Technologies Ltd, a smaller rival, bought out 10.4 per cent in UK-based Axon, beating compatriot Infosys in a hotly contested deal. Wipro keeps seeking acquisitions that will help the company get clients who are looking to cut costs as the global economic recession forces corporations to reduce technology spending.
US information-technology spending growth will slow to 1.6 per cent in 2009, Forrester Research Inc said in a report on December 9, revising an August forecast for 6.1 per cent.
The Citi unit acquisition will be Wipro’s second purchase of a technology-services company. It acquired Infocrossing Inc for $548 million in 2007.