Wipro on the prowl for acquisitions in the $50-100m range
With nine acquisitions up its sleeves, Wipro Technologies, the Bangalore Tiger is hungry for more. The target this time, are companies in the $50-100 million range. At least one acquisition could happen any time soon. Azim Premji, chairman, Wipro, on the sideline of the launch of ‘Bangalore Tiger’, a book on the IT major talked about the buoyant sentiments in the IT sector, Wipro’s acquisition strategy, the focus areas for the company and more. Excerpts:
Do you see an upward revision in billing rates for IT services work?
In most contracts that are getting renewed there is some escalation. It varies from contract to contract so I can’t mention a range. Generally the trend is up. The trend is firm because global salaries are going up.
The markets slipped 172 points on Tuesday on concerns that a slowdown in the US economy may hit technology companies? What impact do you see?
I have no idea about Tuesday’s markets. There are enough analyst reports stating that physical conditions are different, economic conditions are different now. Even some slowdown in the GDP growth of the US economy will not impact the IT industry. So I don’t see any impact.
Are you going to increase focus on the retail vertical now that Wal-Mart is here tying up with Bharti and other global retailers are going to be here?
We are doing a fair amount of work in the retail space and we will be doing much more. We are in dialogue with Wal-Mart. We work with half-a-dozen global retailers. We do implementation for retailers, software development for them, remote support and so on.
Retail is a growth area. We bought a company Enabler, based in Portugal and Brazil, which specialises in retail space. It has 400 people and is very strong in Retek implementation (a retail specific software used by global retail chains). Their customer base is across US, Brazil and Europe.
What about acquisition strategy? You have acquired seven companies this year but all small. Are you planning any big acquisitions?
We have acquired nine in all — seven in IT and two others. We will now be looking for slightly larger buyouts, in the $50-100 million space. The acquisitions are bringing expertise to us, they are strategic to us, they are helping us build intellectual property and they are giving us a better global footprint. We will also be looking at new acquisitions in Europe and America in the long run.
Are you looking at hiring locals in the countries where you operate? What kind of growth do you see in consulting?
We would like to have 25% of our population to be non-Indian as compared to the current 5%. Though we have not set out a time-period for it. For instance, we have 3,300 people in Europe. Before we made the acquisitions, we had just 250 people there. Now locals alone comprise over 1,000 of the 3,300 in Europe.
About 5% of our business comes from consulting. In the next 3-4 years we see 8-10% of our business coming from consulting.
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