Wipro eyes SAP service provider in Germany

Aug 28 | Updated: Aug 29 2008, 05:45am hrs
Wipro Ltd, Indias third-largest computer-services provider, may buy a German competitor that advises companies running business software made by SAP AG. The company will have sales of about $100 million to $200 million, Azim Premji, chairman, Wipro said.

We are looking for somebody who has a strong German presence, rather than a strong global presence, because we want to get more traction in Germany, Premji said. We have seen targets, we are in discussions. The time today is a good time, values have been beaten down. So we are actively working on it. Wipro joins bigger rival Infosys Technologies Ltd, in seeking to acquire companies in Europe to gain customers and opportunities to win bigger contracts as the US economic slowdown curbs orders in its biggest market.

Wipro in July reported that fiscal first-quarter profit rose 14% to Rs 814 crore, missing analyst estimates as customers in the US cut and delayed orders, hit by the credit crisis and an economic slowdown. Sales in Europe accounted for 25% of Wipros revenue in the fiscal year ended March 31, compared with almost 50% from the US.

Germany is open for business; France under new leadership and economic pressures is also opening up, Premji said. We had not focused so much on Germany and France earlier and now we are focusing on these markets, he said.

The global economic slowdown, now flowing into Europe, is unlikely to slow revenue growth at Wipro as it is creating opportunities for winning contracts from large companies looking to reduce costs, Premji said.

There will be some slowdown but it will not be substantial and the slowdown can be offset by winning large deals, he said.

The software-services company is bidding for 12 contracts worth at least $100 million each, Girish Paranjpe and Suresh Vaswani, the joint chief executive officers of Wipros information technology business, said.

Bloomberg