CHENNAI: Indian IT major Wipro announced its second largest acquisition yet on Thursday, stating that it would take over US-based cloud services firm Appirio for $500 million (Rs 3,340 crore) in a full cash transaction.
The acquisition comes in the wake of increased concerns over Indian IT firms’ ability to make the pivot to SMAC (Social, Mobile, Analytics and Cloud) technologies from their legacy businesses.
The Appirio acquisition grants Wipro considerable muscle in the cloud services segment, since it will also give the third largest IT firm in India access to Topcoder, a crowdsourcing marketplace connecting over a million designers, developers and data scientists around the world with customers.
“Once completed, Wipro’s acquisition of Appirio will create one of the world’s largest cloud transformation practices, a game changer in today’s as-a-service and digital economy,” Wipro said in a statement.
Wipro is set to consolidate its existing cloud applications practices of Salesforce and Workday under the Appirio brand and structure. Chris Barbin, Chief Executive Officer of Appirio, will lead the expanded business.
“In an increasingly digital world, as consumer behaviours and expectations continue to be reshaped by experiences, companies are recognising that they need to transform how they engage with customers and employees by leveraging the power of Cloud,” Wipro Chief Executive Officer Abidali Z Neemuchwala said.
Appirio is a rather strong addition to Wipro’s portfolio of acquisitions. Established in 2006, it has offices in Jaipur, San Francisco, Dublin, London, and Tokyo, employing over 1,250 employees worldwide.
Revenues were at $196 million in 2015 and clients include prominent brands like Coca-Cola, eBay, Facebook, Home Depot, Sony PlayStation and Stryker.
According to Wipro’s statement, the acquisition is expected to be closed by the third quarter of this financial year.
Wipro also made another large acquisition before Appirio this year, when it absorbed HealthPlan Services for $460 million.