Wipro Acquires Citiís Captive Unit
Date: Monday , January 05, 2009
In a deal worth $127 million, Wipro technologies, the third largest IT exporter in India, has acquired Citi Technology Services (CTS), the bank's India-based captive unit that provides IT services and solutions to Citi entities worldwide.
Aiming at delivering technology infrastructure services, application development, and maintenance services for six years, Wipro and Citi will ink a Master Services Agreement as part of the all cash deal. This is expected to accrue $500 million during the contract. Focusing mainly on the infrastructure services, Wipro expects to gain reference in the BFSI sector.
Jagdish Rao, Global Head Technology, Citi says, "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."
The Citigroup Technology Services began its operations in 2005. Apart from software development and tech support, the company has been providing remote infrastructure management services such as administration of internal databases, networks, desktop systems,and midrange servers to its customers.
As per the deal, about 2,000 employees in Citi's Mumbai and Chennai centers will be shifted to Wipro. With the new inclusion, Wipro's total workforce will reach 99,202. City Technology has posted revenues of $80 million in 2008 over the $53 million in 2007.
On October 8, Citi sold Citigroup Global Services (CGSL) to Indiaís largest IT company Tata Consultancy Services (TCS) for $505 million. As per the deal, TCS would provide outsourcing services to Citi and its affiliates for $2.5 billion over a period of nine and half years.