Wipro to buy US consulting firm Nerve Wire for $18.7 million

Our Convergence Bureau
25 April 2003

Mumbai: Wipro Ltd has signed a pact to acquire US business and IT consulting firm Nerve Wire Inc for $18.7 million in an all-cash deal. Wipro expects the transaction to be completed in the quarter ending June 2003, subject to regulatory approvals.

Nerve Wire, which has a team of over 90 domain experts and IT consultants, caters to clients in the security services, private client, trading and investment management, banking, insurance, and high-tech industries.

The company will bring to Wipro more than 40 client relationships with over 20 active engagements. Venture capital-funded Nerve Wire, founded in 1999, is a loss-making firm but has a gross margin in the range of 37 to 40 per cent, says Girish Paranjpe, president, financial services, Wipro Technologies. "The loss is due to high overhead cost."

However, the billing rates for Nerve Wire are as high as $185-200 per person per hour, he says. "Moreover, some of the Nerve Wire employees have evinced interest to relocate to offshore locations in India for sometime."