InvestorQ : What is the nature of the recent Wipro acquisition of Capco and what does the deal mean for Wipro?
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What is the nature of the recent Wipro acquisition of Capco and what does the deal mean for Wipro?

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Aditi Sharma answered.
9 months ago
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One of India’s top-notch IT and software solutions company, Wipro, has signed an agreement to invest a sum of $1.45 billion to acquire Capco. Now, Capco is a specialized global technology consultancy which provides digital, consulting and technology solutions to financial institutions globally. It predominantly caters to clients in the banking, financial services and the insurance space.

Why is this deal so special? This deal will be instrumental in making Wipro one of the largest end-to-end global consulting service providers to the BFSI space in the global IT market place. The idea is to combine Wipro’s capabilities in the fields of strategic design, digital transformation, cloud and cybersecurity and created a value-added solution by combining it with Capco’s domain and consulting strength.

Apart from the various domain skills, this deal will also bring in a long list of marquee clients of Capco from the global BFSI space. This would be largely synergistic for Wipro as it also operates in approximately in the space client space. In addition, Capco also services clients in the energy and commodities trading sector, which will be an added advantage for Wipro and it will help Wipro to expand its presence in this unique niche.

This acquisition deal is part of Wipro’s larger inorganic strategy to once again regain leadership in the IT space. It had started out as a leader in the IT space but had eventually lost out in the valuation sweepstakes to TCS, Cognizant and Infosys by a huge margin. Recently, HCL Tech had also overtaken Wipro in terms of total revenues and market capitalization. The deal is subject to regulatory approvals and will close by Jun-2021.

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