(By Mayur Pahilajani - iStockAnalyst Writer)
New York, NY - Wipro Technologies, a division of Wipro Limited (NYSE: WIT), said Tuesday it will purchase Citi Technology Services Ltd., a unit of Citigroup Inc. (NYSE: C), for around $127 million in cash.
“Citi has played a pioneering role in leveraging technology for banking," Girish S. Paranjpe, Jt CEO, IT business and member of the board at Wipro, said in a statement on Tuesday.
"We are pleased that our domain expertise and infrastructure management capabilities positioned us as their partner of choice. This posit ion has further strengthened with this strategic transaction.
Wipro is India’s third-largest software services provider and has been expanding to tap into new markets. India-based Citi Technology Services mainly provides software and solutions to the banking industry.
“This partnership enables Citi to leverage Wipro’s expertise in information technology services where we have significant plans for driving higher efficiencies by leveraging the Global Delivery Model," Citi's Chief Operations and Technology Officer Marty Lippert said.
Since its inception in 2005, Citi Technology Services has been providing IT services to Citi and its affiliates around the world, with 1,650 employees. Citi Technology Services’ revenues are expected to be around $80 million in calander year of 2008.
As part of the deal, Bangalore-based Wipro will provide Technology Infrastructure Services (TIS) and Application Development and Maintenance (ADM)
services worth at least $500 million over the next six years to Citigroup.
“Citi Technology Services team’s expertise in addressing the risk and compliance issues for banking industry positions us well to offer similar scale and complexity of services to other leading banks in US and Europe," Wipro's Sr. Vice President, Finance Solutions, Soumitro Ghosh said.
Wipro is expected to welcome all the employees of Citi Technology Services as there are not overlapping positions.
"We are confident that the skillsets we have acquired will enhance our capabilities to compete for more TIS business in the financial services industry in general and Citi in particular,” Ghosh added.
The shares of Wipro were increasing by 28 cents or 3.47 percent to $8.36 at 11:27 a.m. ET in composite trading on the New York Stock Exchange on Tuesday. The stock has traded as low as $5.66 and as high as $15.99 in the last 52-week period.
Source: http://www.wipro.com/news/pdf_file/wipro_to_acquire_citi_technology_services.pdf
