Indian IT services giantwill acquire global management and technology consultancy company Capco to strengthen its international financial services digital transformation.
The $1.45bn takeovers of 20-year-old Capco, headquartered in London, will add financial servicesexpertise at a time when digital transformation is accelerating. It also means Wipro will hire 5,000 additional staff in 30 locations worldwide.
Thierry Delaporte, recently appointed CEO at Wipro, said the deal would help it “deliver high-end consulting,offerings to our clients”.
Lance Levy, CEO of Capco, echoed Delaporte on the benefits of the companies’ combined strengths. “Together, we will offer bespoke transformational end-to-end solutions, nowtechnology at scale, to create a new leading partner to the financial services industry,” he said.
In the post-Covid-19 period, enterprises. during the pandemic have taught them the importance of operating remotely and providing digital services where required. Financial services firms must also ensure they transform their services as customers increasingly move online.
Peter Schumacher,, said the significant acquisition reflected changes introduced by Delaporte, who became Wipro CEO in July 2020. “Many of Wipro’s past acquisitions have failed, and it’s no surprise many financial analysts and other industry experts are skeptical that this deal will deliver the synergies and earnings Wipro has promised.”
Peter Schumacher, The Value Leadership Group
He said he would have expected the significant acquisition from one of the larger Indian suppliers, Cognizant or Infosys, but not Wipro. “Delaporte’s initiatives reflect that he is not only trying to make Wipro faster and more agile by simplifying and decluttering the company’s bureaucracy but, more importantly, he is also trying to differentiate Wipro by adding and developing new capabilities,” he said.
Schumacher said it was a significant gamble, however. “Many of Wipro’s past acquisitions have failed, and it’s no surprise many financial analysts and other industry experts are skeptical that thiswill deliver the synergies and earnings growth Wipro has promised,” he said.
He questioned whether Wipro was “overstepping its ability toactivities in parallel” and “bitten off more than it can chew”.
Schumacher added that Wipro, like many large India-based IT, is cash-rich and eager to strengthen its market position further.
Several Indian IT services companies, including Wipro, have also beenby taking over customer operations. Some seizures have also of customers.
In December 2020,as part of an IT outsourcing deal worth up to $1bn (£745m) over nine years. The Indian supplier will pay £36m for the unit, , Romania, and India.
Meanwhile, late last year, Tata Consultancy Services (TCS)of an IT operation of Prudential Financial as the US insurance company for free. the company’s €1 takeover of the IT unit of Postbank from Deutsche Bank.
Although the acquisitions were for token amounts, the acquirers take on the operating costs.