Wipro, India’s third-largest information technology (IT) services provider, on Wednesday said it had signed an agreement to acquire New Jersey-based back office services provider Viteos Group for a consideration of $130 million (around Rs 860 crore).
This is the Bengaluru-headquartered company’s second acquisition this month and third in 2015. Earlier this month, Wipro had agreed to acquire cellent AG, a German IT and consulting services provider for $77 million (around Rs 517 crore).
Founded in 2003, Somerset-headquartered Viteos Group provides business process-as-a-service (BPaaS) to alternative investment management companies in the US, Europe and Asia. The firm, which employs more than 400 associates, reported $26.5 million in revenues in FY15. This makes the deal valuation close to five times of its FY15 sales, which is seen in the higher side.
“The company is valued at market cap to sales at 4.9xFY15, which looks on the higher side, unless the company is accompanied by higher return of equity’s which can be sustained over a long term,” equity research firm Angel Research’s analyst Sarabjit Kour Nangra said in a note.
In the past year, Wipro has been aggressively pursuing its inorganic growth strategy, which is primarily focused on acquiring newer capabilities and platforms that can boost its drive towards non-linearity. Apart from cellent AG, Wipro had in July acquired Designit, a Denmark-based global strategic design firm for a consideration of ^85 million (around $94 million or Rs 595 crore).
As on September 30, 2015, Wipro had a cash and cash equivalent reserve of Rs 10,048 crore. “We are excited to be part of a trusted global leader and the transaction is a further recognition of our value and validation of our commitment to deliver excellence through our investments in people, process and technology,” said Shankar Iyer, CEO & founder of Viteos Group.
Wipro’s share price at Rs 555.80 was marginal up at the end of the day’s trading on the BSE on Wednesday.