Wipro spends €1.2bn on Capco to bolster BFSI credentials
Wipro has announced an agreement to acquire Capco, a management and technology consultancy geared towards the banking and financial services market. The deal will see Wipro spend approximately €1.2bn ($1.45bn) on the firm, which makes it the company’s largest acquisition to date.
London-headquartered, Capco boasts more than 5,000 consultants with a track record of delivering services to many of the largest banks and financial institutions in the world. The firm also has a dedicated energy division, which has clients across the energy and commodities trading sector. Projects include helping Natwest set up Mettle, a new bank targeting small to medium-sized businesses and partnering with a South American bank to launch a new digital service targeting millennials. This project that saw Capco manage the end-to-end consulting and delivery of the digital bank from system integration services and enterprise platform development to testing, go-live readiness and post-go-live support.
The banking and financial services industry is a hugely important market for many IT services firms, and has been the source of some of the largest contract awards in the last 12 months. The acquisition will see Wipro bolster its delivery capability in the market strengthened significantly, with the firm advising the investment will make them one of the largest end-to-end global technology and transformation service provider to the banking and financial services industry.
Wipro already has a strong business in the BFSI space, and the Capco deal will consolidate its position as one of the top 20 IT services providers in the sector at a worldwide level. Last year, it secured a multi-year deal with Metro Bank to deliver and transform testing and environment management services through automation, service virtualisation and DevSecOps enablement. In 2019 it won a seven-year deal worth $300m from private-sector lender ICICI Bank for its digital services suite, leveraging Wipro HOLMES, the company's Artificial Intelligence platform.
Capco and Wipro's combined forces will supplement each other in a lucrative but highly competitive market. Increasingly enterprises are looking for both pragmatic technological solutions, and consulting heft to tailor solutions to specific business challenges. With Wipro's track-record of delivery in IT Services and Capco's experienced consulting team and deep domain expertise, they can build a differentiated and highly scalable model to the evolving needs of the BFSI sector, helping them respond to the inevitable rise of digital banking and the operational challenges created by the COVID-19 pandemic.
And with consulting talent based in over 30 locations - spread across countries including the US, UK, France, Germany, Poland, Slovakia, Austria, Poland, Switzerland, Brazil, India, Singapore, Malaysia and Hong Kong - Capco will also help Wipro in catering to the growing demand for onshore and nearshore capability. Furthermore, Capco's strong footprint in Europe aligns well with Wipro's strategic ambitions in the region, with investment and focus placed on turning Europe into a growth engine for the firm.
Capco itself has an interest M&A history. The firm has already been acquired once in 2010, by the financial services company FIS, which has its roots in core banking and most recently made the headlines when it acquired the payment services provider Worldpay for $43bn in 2019. However, FIS sold Capco to a private equity firm in 2017, which subsequently inked the deal with Wipro. The acquisition is subject to customary closing conditions and regulatory approvals and is expected to close in the quarter ending June 30, 2021.