Wipro Agrees To Buy Australian Cybersecurity Provider; Stock Gains
Shares of Wipro Ltd. gained after the software services exporter agreed to acquire an Australia-based provider of cybersecurity, development operations and quality engineering services.
Wipro has signed an agreement to acquire Ampion for a cash consideration of $117 million, according to an exchange filing. The deal is likely to close in the quarter ending June 30, 2021 and is subject to customary closing conditions and regulatory approvals.
“Wipro and Ampion’s combined offerings, powered by engineering transformation, development operations and security consulting services will bring scale and market agility to respond to the growing demand of customers,” the filing said.
Based in Melbourne, Ampion has a local team of more than 500 consulting and technology specialists.
“We see Ampion as a complementary force that will help us expand our footprint and accelerate our journey in the Asia-Pacific region,” NS Bala, chief executive officer (Asia Pacific, Middle East, Africa) at Wipro, was quoted as saying in the filing.
This is the second large acquisition announced by Wipro in as many months. The company in March had agreed to acquire London-based consulting firm Capco for $1.45 billion, the largest ever in its history.
After Capco’s deal, Morgan Stanley in its note said that large acquisitions by Indian IT companies have generally not yielded the desired results. “We think the market will wait to see a smooth integration to cheer this transaction.”
Shares of Wipro rose as much as 2.1% in early trade on Thursday to Rs 422.85 apiece. Of the 49 analysts tracking Wipro, 20 have a ‘buy’ rating, 15 suggest a ‘hold’ and 14 recommend a ‘sell’, according to Bloomberg data. The average 12-month consensus price target implies an upside of 5.7%.