In line with its strategy to tap opportunities in the digital space, Wipro on Thursday said it would acquire Designit, a Denmark-based global strategic design firm, for Euro 85 million (Rs 595 crore, or $94 million). The all-cash deal will also have a component of deferred payment, to be payable through the next three years, upon the acquired entity achieving certain milestones.
The acquisition is expected to strengthen Wipro Digital, the company’s digital business unit (set up in March this year).
Founded in 1991, Designit is considered one of the world’s largest privately-held design firms, with an employee base of about 300 and design studios across nine cities globally.
The company provides strategic design, user experience and interaction design services to many global brands in segments such as health care, banking, automotive and retail. Some of its clients include Cisco, Harman, Brussels Airlines, Vodafone, Jabra, Danske Bank and Telefonica.
“Our clients are looking to us to help them transform their businesses and move at the speed of digital. Strategic design holds key in solving these complex challenges, with the help of multi-disciplinary teams of strategists, designers and engineers. With our acquisition of Designit, we will complement the capabilities of an established design leader with our engineering heritage and bring compelling value to our clients,” said Rajan Kohli, senior vice-president and global head, Wipro Digital.
|Significant acquisitions made by Wipro over the years|
|2005 NewLogic $56 mn|
|2006 Enabler $52 mn|
|2006 cMango Inc $20 mn|
|2007 Infocrossing Inc $600 mn|
|2011 SAIC's oil & gas technology business $150 mn|
|2012 Promax Application Group $36 mn|
|2013 Opus CMC $75 mn|
|2014 Atco I-Tek $195 mn|
Increasingly, vendors offering traditional IT outsourcing services are aggressively looking at new areas such as social, mobility, big data & analytics and cloud and trying to position themselves as end-to-end digital partners. Strengthening design capabilities is significant key in these areas, as this affects consumer experiences in a major way.
“The biggest thing we are betting on in the next couple of years is what we call ‘digital’. We don’t believe we can do it in a traditional manner because the culture in digital is going to be about speed, not how much time one takes to develop something or how much will cost, based on the time deployed,” T K Kurien, chief executive of Wipro, had said at a meeting with analysts. “So, we are going to have a separate team and separate leadership, as it will address a completely different economic buy in a completely different way.”
Among Indian IT services companies, Wipro, known for its ‘string of pearl’ acquisition strategy, has been one of the most active. So far, it has acquired nine companies, the largest being Infocrossing, which it bought for about $600 million in August 2007.
As of March 31 this year, Wipro had cash and cash equivalent reserves of Rs 15,894 crore.