Wipro acquires Citi's captive IT unit for $127 Million
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Wipro acquires Citi's captive IT unit for $127 Million
Bangalore: The speculations on the Citigroup's shaky fate has unveiled a new turn with India's second largest IT bellwether Wipro Technologies acquiring Citi Technology Services (CTS), the India-based captive provider of IT services and solutions to Citigroup. The $127 million deal, with $27 million to be paid in cash for premium and rest for assets and goodwill, will be completed in March 2009. As part of the all cash deal, Wipro and Citi will sign a Master Services Agreement for delivery of technology infrastructure services and application development and maintenance services for six years, which is projected to accrue $500 million during the contract. Focussing mainly on infrastructure services, through the deal Wipro expects to gain reference in the BFSI sector. "Citi has played a pioneering role in leveraging technology for banking. Our domain expertise and infrastructure management capabilities have positioned us as their partner of choice," said Wipro joint CEO, Girish S. Paranjpe. The new pitch will be for a distinctive service on the line of infrastructure without any inclusion of any BPO. "For Citi, the deal is a way to leverage our scalability and productivity. There is no impact of the slowdown, but we have reached a point where we can't scale up any more on our own and hence Wipro will provide a great value to our organization," said Jagdish Rao, Global Head Technology, Citi. The company, which has centers in Mumbai and Chennai, employs around 2000 people who will be shifted to Wipro after the company is integrated with the IT bellwether. Revenue of City Technology is about $80 million in 2008, which was $53 million in 2007. The 'distress' sale of CTS comes close on the heels of Citi selling its Citigroup Global Services Ltd (CGSL) to India's largest IT bellwether Tata Consultancy Services (TCS) for a whopping $505 million Oct 8.

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