Eyes more business from financial services industry
Indian IT services provider Wipro Technologies will acquire Citigroup’s arm, Citi Technology Services, for an all-cash offer of $127m. The acquisition is expected to be closed in March 2009.
Founded in 2005, India-based Citi Technology provides IT services to the Citigroup entities in more than 32 countries. The company offers end-to-end services in financial domains such as Treasury, Banking Systems, Capital Markets, Cash and Trade, Cards and Wealth Management, through its 1,650-strong staff.
Wipro will sign a Master Services Agreement with Citi for the delivery of Technology Infrastructure Services (TIS) and Application Development and Maintenance (ADM) services. The six-year agreement is expected to earn $500m revenue for Citi.
Soumitro Ghosh, senior vice president for Finance Solutions at Wipro, said: Citi Technology Services team’s expertise in addressing the risk and compliance issues for banking industry positions us well to offer similar scale and complexity of services to other leading banks in the US and Europe. We are confident that the skillsets we have acquired will enhance our capabilities to compete for more TIS business in the financial services industry in general and Citi in particular.
Don Callahan, chief administrative officer of Citi, said: This sale was the result of a thorough process to ensure we were partnering with the right company for our businesses and our clients. Our Citi Technology Services employees will join a larger information technology organisation with additional third party growth opportunities. This transaction is consistent with our efforts to improve our operating leverage while we focus on our core banking competencies.
Wirpo’s IT services business has reported revenues of INR47.50 billion – 36% increase year-on-year — for the second quarter ended September 30, 2008. At the end of the quarter it had 97,552 employees, including 75,748 in IT services and 21,804 employees in the BPO business.
The business added 28 new clients during the quarter, significant among them being a financial services group in the EMEA region; a consumer apparel company in the US, a French telecom company; a German electrical systems company; and a water and waste-water service utility in the UK.