Wipro acquires Citi Technology Services for $127 million
23 Dec 2008
Wipro Technologies, the IT services business of Wipro Ltd, has acquired Citigroup subsidiary Citi Technology Services, the technology and infrastructure outsourcing arm of Citibank for $127 million, in an all-cash deal.
Citi Technology Services is the India-based captive information technology services and solutions provider of Citibank worldwide.
Citi Technology Services, a 100 per cent subsidiary of Citigroup, provides critical technology infrastructure support, development and deployment of strategic software applications in the BFSI domain. It provides application development, maintenance and testing support for credit cards, core banking, equities and treasury to Citibank entities worldwide.
As part of the deal, the two parties will sign a master service agreement, which will ensure Wipro at least $500million in revenues over a period of six years.
Citi Technology Services has around 650 employees who service Citibank offices in 32 countries. It estimates revenue of $80 million for FY08-09.
''Citi has played a pioneering role in leveraging technology for banking. We are pleased that our domain expertise and infrastructure management capabilities positioning us as their partners of choice,'' said Girish Paranjpe, Joint CEO, IT business of Citi Technology Services.
This is the second time that Citibank, will sell off its Indian back-office operations. In early October, it had sold its captive BPO Citigroup Global Services (CGSL) to Tata Consultancy Services for $505 million. It was the biggest M&A deal of India in 2008.
The trend has clearly emerged as businesses concentrating on their core competence areas and hiving off other support areas to specialised agencies to reduce costs.