Premium information technology company Wipro Ltd.WIT has inked a definitive agreement to buy U.S.-based capital market software provider, Viteos Group, for $130 million. This acquisition reflects Wipro's efforts to penetrate into the high-margin capital software market by investing in vertical platforms that can offer its clients platform-based services. Wipro expects to close this acquisition by first quarter of 2016, subject to fulfillment of obligatory closing conditions and regulatory approvals.
Provider of Business Process as-a-Service ("BPaaS") for Alternative Investment Management Industry, Viteos is a 12-year old company that provides a spectrum of offerings for the capital market. Leveraging the shadow-accounting services, the company has garnered an unparalleled reputation across the U.S., Europe and Asia.
Even after the acquisition, Viteos will retain its brand name and continue to expand its platform-based outsourcing business services in the larger asset management industry. In this regard, Wipro's presence across diverse geographies and its solid customer base will come to Viteos' aid.
Viteos' proprietary platform is extensively deployed for transformation and integration of post-trade operations. This is particularly beneficial for Wipro, as the technology giant can launch innovative solutions to tap new lucrative segments of capital markets by leveraging these platforms. The company also believes that harnessing the technological power of Viteos will allow them to gain "non-linear" and robust revenue growth, going forward.
Wipro's latest move comes as a prudent strategy in the face of ever-mutating IT services industry which is briskly inching from Business Process Service ("BPS") toward Business Process as-a-Service. The company currently enjoys a dominant position as a BPS provider to multiple investment banks specializing in platform-led transformation and utility-based offerings across the globe. This buyout will also help Wipro stabilize its competitive position in the buy-side of the financial industry, where it presently specializes in sell-side services.
Wipro currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include MSCI Inc. MSCI , RealPage, Inc. RP and ePlus inc. PLUS . While MSCI and RealPage sport a Zacks Rank #1 (Strong Buy), ePlus holds a Zacks Rank #2 (Buy).