Wipro strengthens its position in banking solutions, acquires Viteos

Wipro a leading global information technology, consulting, and business process services company in a stock exchange filing said that it has agreed to buy the US-based Viteos Group, a business process as a service (BPaaS) provider for the alternative investment management industry in an all cash deal for USD 130 million. Viteos is headquartered in Somerset, New Jersey. The deal awaits regulatory approvals and is most likely to be completed by end of  FY16.

Viteos has proprietary platform which offers transformation and integration of post-trade operations across asset class. This existing platform can be used by Wipro across its geographical borders to boost up its capital market solutions offering. Viteos will help Wipro make further inroads into banking and financial services industry, a sector where it has traditionally lagged larger peers such as Tata Consultancy Services, Cognizant and Infosys.

This acquisition would strengthen Wipro’s existing leadership position in Business Process Services (BPS) provided to some of the biggest global investment banks and expands Wipro’s market portfolio in fund accounting services. Viteos Group will provide full suite of shadow- accounting services, middle office and accounting solutions to the Alternative Investment Management industry in the United States, Europe and Asia.

Acquisition would enhance Wipro’s presence in capital market outsourcing solutions by making use of Vetoes capabilities to further acquire new clients. It will position Wipro as a leader in this segment amongst competitors as it would provide end-to-end services across capital markets. Wipro specialises in platform-led transformation and utility based offering in reconciliation, KYC, settlements, middle office, asset servicing etc. These credentials of Wipro are primarily on the sell-side and acquisition of Viteos would add similar capabilities on the buy-side. Wipro’s expert IT solutions would complement Viteos's existing customer base by providing wider portfolio of services in both buy-side and sell-side verticals.

Financially Viteos has been growing at a revenue CAGR of 22 per cent for the past three years. Given a strong product profile and leadership position in certain categories would help Wipro grow in a non-linear fashion and achieve higher revenue realisation. Viteos will retain its identity to leverage its brand in the buy-side and expand its offering into the larger asset management industry with the backing of Wipro’s size and presence.

Wipro continuing with its ‘String of Pearl’ strategy, has bought several small size companies which strategically fits into its business and future plans. Over the past several months, Wipro has been actively pursuing acquisitions. It bought Denmark-based Designit for 85 million Euros and recently bought German IT and consulting services provider Cellent AG for USD 77 million. Reacting to the news of acquisition, Wipro stock opened with a gain of close to 1 per cent before closing flat at Rs 555.80.