Wipro to buy Infocrossing for $600m

IT major Wipro Ltd said on Monday it is buying Nasdaq-listed Infocrossing Inc in a deal that values the acquisition target at about $600 million.

Wipro has offered to pay $18.70 per share of the New Jersey-based company that provides select outsourcing services to mid-sized companies in the United States, said Wipro's Chief Financial Officer Suresh Senapaty.

The acquisition, the biggest-ever by an Indian services company, will help Wipro enhance its offerings to customers, especially those involving off-shoring of technology infrastructure services by Western companies to low-cost destinations like India, he said.

``We have been pursuing organic growth, and at the same time looking for inorganic opportunity,'' Senapaty said. ``Infocrossing is a perfect fit (for Wipro).''

The board of Infocrossing has approved and recommended the deal to its shareholders. The offer from Wipro represents a 6 per cent premium over the last closing price of Infocrossing shares, he said. Wipro plans to make an open offer to buy all outstanding shares of the company.

The transaction, which is subject to regulatory approvals, is expected to be completed by December, Wipro said, adding that the takeover will be funded from its own cash reserves.

Infocrossing operates five data centers and employs about 900 people. Its sales totaled US$229 million last year, leaving the company with a net profit of $8.4 million, an Wipro statement said.

(Source: Economic Times)