On August 6, 2007, the Company announced that it had signed a definitive agreement to be acquired by Wipro Technologies, the global IT services business of Wipro Limited, for $18.70 per share in cash. The tender offer is subject to a number of customary closing conditions, including regulatory approvals, and is expected to close by the fourth quarter of 2007.

The highlights are:

• Wipro will gain 900 workers in five U.S. data centers
  


• This acquisition broadens Wipro's data centers and mainframe capabilities
  


• Gives Wipro a uniquely positioning in the remote infrastructure management space.
  


• Infocrossing to considerably enhance Wipro's ADM & BPO offerings to Healthcare customers.

The global IT infrastructure market has been projected to be $150 billion and the global market opportunity for remote infrastructure management services has been predicted to reach $70 billion, according to industry association NASSCOM.

"Wipro Technologies has identified global infrastructure services as an important driver of growth for the company and is pleased to add Infocrossing, which provides integrated managed infrastructure services to premier global clients," said Suresh Vaswani, President, Global IT Service-lines, of Wipro.

while many U.S. businesses have gone the route of having their data centers managed offshore to save costs, many still aren't comfortable with having their data centers actually outside the United States, said Dean Davison, VP of research at offshore consulting firm NeoIT, in an interview. With Wipro's acquisition of Infocrossing, Wipro expands its appeal as a full-service IT outsourcing firm for U.S. customers. Before, Wipro's services offerings might have been attractive to "two out of 10" U.S companies; now it goes to "seven out of 10," Davison said.

The acquisition, one of the largest by an Indian IT company in the United States, is part of an ongoing trend by offshore applications development outsourcers "wanting to expand to full-service" companies, he said. "It's not new, but it is big." The acquisition of Infocrossing is just part of Wipro's plans to expand its presence in the United States, said Ramasubbu. In about three months, Wipro will open an Atlanta software development center, he said. The company also is building relationships with U.S. universities and colleges to attract U.S. workers, he said.

"Infocrossing is pleased to be joining such a strong global organization such as Wipro Technologies," said Zach Lonstein, Chairman and Chief Executive Officer of Infocrossing. "We selected Wipro after conducting a full process and believe that by coupling our strong services and U.S.-based operations with the global delivery model of Wipro Technologies, we will be able to drive additional value for the shareholders and clients of both our companies."

"Total Outsourcing Services, which include our IT infrastructure services, grew 75% in the past year proving global clients are increasingly realizing the value of these services. This acquisition of an acknowledged industry leader broadens the data center and mainframe capabilities of Wipro Technologies to uniquely position us in the remote infrastructure management space. Through Infocrossing we are deepening our presence in the United States with the addition of five data center locations and approximately nine hundred employees." Sudip Banerjee, President Enterprise Solutions of Wipro Technologies added, "With its unique Platform based solutions, Infocrossing also brings in significant expertise in Health plan & Payer Management segments. With its proven track record of processing over 175 million claims annually and providing contracted services to over 90 managed care organizations, Infocrossing will considerably enhance  Wipro's ADM & BPO offerings to our Healthcare customers."

Source:1,2

Tags: wipro - infocrossing - infrastructure - adm

Prashanth Rai