Wipro Limited on Wednesday said it has signed a definitive agreement to divest its hosted data centre services business to Ensono for $405 million. Ensono is a hybrid IT services provider based in Illinois, US. The acquisition is subject to customary closing conditions and regulatory approvals and is expected to close in the quarter ending June 2018, Wipro said in a regulatory filing.
Wipro and Ensono have also signed a long-term partnership agreement to jointly address the hybrid IT requirements of Wipro's new and existing enterprise customers. As part of the agreement, Wipro will make a strategic investment of $55 million in Ensono's combined entity, the Bengaluru-based company said in its statement.
"As we embrace our strategy of focusing on newer digital areas of spend, our strategic investment and partnership with Ensono will enable us to remain committed to meeting the hosted data centre services requirements of our customers. This partnership will enhance the global data centre footprint and expand the available talent pool which will give us economies of scale and allow us to offer end-to-end capabilities in the infrastructure space, better than ever before," said Kiran Desai, senior vice president, global infrastructure services, Wipro Limited.
Wipro said it will unlock value by transitioning eight data centres and over 900 employees of its hosted data centre services business to Ensono.
Hosted data centre services business is one of the three businesses that became a part of Wipro when it acquired Infocrossing Inc in 2007. The other two businesses - Medicare & Medicaid services in the health insurance space and ERP implementation services - have been integrated with other Wipro businesses and are not part of this divestment, the filing added.
Ensono provides hybrid IT services, from cloud to mainframe, that enable clients to digitally transform their business. Through the acquisition, Ensono is doubling in size, diversifying its client portfolio and increasing its annualized revenue to be in excess of $550 million.
"This is the third acquisition in less than three years for Ensono. This particular acquisition and partnership with Wipro substantially increases our ability to scale and service our growing client portfolio. We are increasing our geographic presence by expanding our data center operations in Germany, UK and the US, as well as establishing an operational presence in India," said Jeff VonDeylen, CEO, Ensono. "These are strategic moves that bring us one step closer to our vision of being a recognized leader in true hybrid IT and a relentless ally to our clients."
Jefferies LLC acted as an exclusive financial advisor to Ensono for this transaction, and Credit Suisse Securities (USA) LLC acted as the sole financial advisor to Wipro.