BW Communities

Wipro Buys Promax Applications For Rs 190 Cr

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Wipro, fourth largest IT services exporter, has signed an agreement to buy Australia's Promax Applications Group for AUD35 million (approximately Rs 190 crore). Wipro's announcement that it has acquired Australian analytics company Promax Applications Group in an all cash deal paying 2.3 times its revenues, comes as no surprise. Wipro already gets about $600 million from the analytics business which is approximately 10 per cent of its overall revenues from the IT business and employs around 8000 people in this practice and in the past has been one of the most aggressive M & A player amongst Tier I companies. In the past it has famously under its 'string of pearls' been agressive in acquiring companies some of which like the NerveWire acquisition has not been very successful, whereas some of the others including its Spectramind acquisition has helped leapfrog growth. IT Companies are looking to value add for clients struggling in a slow growth environment. Analytics help in mining data collected by the clients, analysing and help them serve their customers better. Cognizant for instance, bought MarketRx and Core Logic mainly for their analytics practice. Rishad Premji, the M&A head of Wipro, said that the company is focused on 3 areas in its acquisition strategy: Addressing domain gaps, identifying opportunities in analytics, enterprise mobility and platform based solutions in cloud, as well as geographical expansion in markets like France and Germany. Wipro said it would take Promax's productized service beyond the existing base in industries like food and beverage, pharma as well as technology and cross sell to other existing client base. Promax has 70 employees who will be absorbed into Wipro. Avendus Capital acted as the exclusive financial advisor. Soaps to software conglomerate Wipro Ltd, last week announced its results for the financial year 2011-12, wherein it declared revenues of $7.37 billion (of which IT services revenue alone were $5.92 billion) and a net income of $1.1 billion. Wipro does not provide guidance for the full year but said it expects revenues to be flat in the IT services business in the first quarter between $1.52 bn to $1.55 billion. The company made the announcement after Wipro shares had closed the day down 0.41 per cent to close at Rs 405.1, on a day when the Sensex was in the green up 0.76 per cent to end the day at 17318.8 points and when the IT index had also closed the day in positive territory by 2.37 per cent.