Wipro to acquire London based Capco in $1.45 bn all-cash deal

In its largest ever acquisition, Wipro, the country’s fourth largest IT services exporter, said it will acquire London based Capco, inclusive of holding companies Cardinal US Holdings and Cardinal Foreign Holdings and its Indian subsidiary Capco Technologies, in a $1.45 billion all-cash transaction.

The deal is slated to close by the financial quarter ending June 2021, subject to antitrust approvals.

The acquisition is also the second largest in recent years by an Indian IT services company. In late 2018, HCL Technologies bought select software assets from IBM in a $1.8 billion deal.

Capco, founded in 1998, is a global management and technology consultancy that provides digital, consulting and technology services to financial institutions spread across regions of the Americas, Europe and Asia Pacific, as per a statement. It also services clients in the energy and commodities trading sector.

In the calendar year ended December 2020, Capco reported consolidated revenues of $720 million, as per Bengaluru based Wipro’s stock exchange filing. In CY19, the figure stood at $693 million, and $734 million in CY18. The two decade old company’s CY20 revenues are split across the geographic areas of North America (55%), Europe (41%), and Asia (4%).

Capco’s team includes an executive team and over 5,000 business and technology consultants based across over 30 global locations including the United States, Britain, France, Germany, Poland, Slovakia, Austria, Poland, Switzerland, Brazil, India, Singapore, Malaysia and Hong Kong.

“Wipro and Capco share complementary business models and core guiding values, and I am certain that our new Capco colleagues will be proud to call Wipro home,” Wipro CEO Thierry Delaporte said.

Over the last two months, the Infosys rival has gone about strengthening its top-deck across international markets of Brazil, Germany, Austria, Japan, Southern Europe, and Switzerland.

Read: How Thierry Delaporte is re-building Wipro’s growth engine

“Growth in financial services is driven by demand across pretty much all sub verticals, led by demand in digital operations primarily; cloud infrastructure services also and digital transformation,” Delaporte had said during the company’s most recent earnings announcement.

The Bengaluru-based IT services player, in January, reported a 20.8% increase in quarterly profit (Q3) in a period preceding a major rejig of its service lines and markets.

The Capco acquisition comes in the wake of a string of smaller buys the firm has made over the past couple of years. In 2020, it acquired Encore Theme Technologies, a software-as-service (SaaS) and cloud solutions provider for the financial services sector, for upto Rs 95 crore ($12.8 million at current exchange rates). It also acquired engineering services company Eximius Design, European Salesforce multi-cloud partner 4C for €68 million and Brazilian firm IVIA Serviços de Informática for $22.4 million.