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Wipro looking out for more acquisitions: Premji
Fakir Chand in Bangalore |
January 17, 2003 16:32 IST
Buoyed by a string of acquisitions made during the first nine months of the current fiscal year (2002-03), Wipro Technologies, the flagship company of the Bangalore-based IT bellwether, is looking out for more acquisitions in the fourth quarter as well as in the new year.
Announcing the financial results for the third quarter ending December 31, 2002, in Bangalore on Friday, Wipro chairman Azim H Premji said the company was on the lookout for opportunistic acquisitions to leverage upon its existing strengths and global presence.
"The global tech industry continues to be challenging. Mergers and consolidations have become the order of the day. With valuations being realistic and much lower than during the tech boom times, the scope for strategic acquisitions in India and overseas is brighter now," Premji stated.
Though Premji declined to spell out the company's acquisition plans in the fourth quarter of the current fiscal year, he revealed that global tech companies were in the process of hiving off those subsidiaries or outfits that may not achieve critical mass for generating revenues.
"The potential for strategic acquisitions is greater now than before. As part of the consolidation process, major companies are trying to be lean and mean. We will acquire only those, which fit into our strategic business in
the long term," Premji asserted.
"Our acquisition plans focuses on both strategic and opportunistic. For instance, Wipro Spectramind and Global Energy Practice of AMS during this fiscal year were strategic in nature, while that of Ericsson R&D centres was opportunistic.
"We have also invested in a strong business development team for due diligence and scouting. We are confident that this investment will realise results," Premji added.
Wipro made a total investment of $101 million for the three acquisitions of Wipro Spectramind ($70 million), Global Energy Practice ($25 million) and GE Medical Systems Information Technologies Ltd ($6 million) for a 40 per cent equity stake.
The company has, however, not disclosed the acquisition cost of Ericsson India Ltd's two research and development centres in Bangalore and Hyderabad as it was on book value with depreciation.
According to Wipro chief financial officer Suresh Senapaty, the Ericsson transaction will be completed by this month-end.
"Concurrently, Ericsson AB has signed an agreement to purchase consultancy services from Wipro for $17 million till the end of December 2004," Senapaty added.