Wipro to divest hosted data centre services business to Ensono for $405 mn

India's third largest software services firm Wipro on Wednesday said it has signed a definitive agreement to divest its hosted data centre services business to Ensono for $405 million.

The deal will see transition of eight data centres and over 900 employees of the hosted data centre services business to Ensono, Wipro said in a statement.

"The acquisition significantly expands Ensono's geographic footprint and global service capabilities, taking the company one step closer to achieving its vision of helping clients harness the power of hybrid IT to transform their businesses on a global scale," it added.

Wipro and Ensono have also signed a long-term partnership agreement to jointly address the hybrid IT requirements of Wipro's new and existing enterprise customers.

As part of the agreement, Wipro will make a strategic investment of $55 million in Ensono's combined entity.

The hosted data centre services business is one of the three businesses that became a part of Wipro when the Bengaluru-based firm had acquired Infocrossing Inc in 2007.

The other two businesses -- Medicare & Medicaid services in the health insurance space and ERP implementation services -- have been integrated with other Wipro businesses and are not part of this divestment, the statement said.

"This partnership will enhance the global data centre footprint and expand the available talent pool which will give us economies of scale and allow us to offer end-to-end capabilities in the infrastructure space, better than ever before," Wipro Senior Vice President (Global Infrastructure Services) Kiran Desai said.

Ensono, which provides hybrid IT services, will be able to double in size and increase its annualised revenue to be in excess of $550 million through the acquisition.

"This is the third acquisition in less than three years for Ensono... We are increasing our geographic presence by expanding our data centre operations in Germany, UK and the US, as well as establishing an operational presence in India," Ensono CEO Jeff VonDeylen said.

The acquisition, subject to customary closing conditions and regulatory approvals, is expected to close in the quarter ending June 2018.

The standalone revenue of the data centre business was $241 million for FY2016-17 -- 2.9 per cent of Wipro's consolidated revenues for FY16-17). The net worth of the business was Rs 24.25 billion (net of cash and debt), Wipro said in a BSE filing.

Ensono is a portfolio company of Charlesbank Capital Partners and M/C Partners. The privately-held company has offices in the US, the UK, Poland and Germany, and has over 1000 employees. Its revenue stood at $285 million for the year ended December 2017.