India’s third largest IT services exporter Wipro on Thursday announced the acquisition of Denmark-headquartered design firm Designit for 85 million euros in an all-cash deal. This is the first acquisition by the IT major for its year-old business unit Wipro Digital, a segment projected to be an important growth engine. The Designit acquisition is expected to close this quarter.
The acquisition would bring into Wipro’s fold over 300 people and presence in nine locations. Designit reported a revenue of 27 million euros for calendar year 2014 and the acquisition also has a clause of performance-based contingent consideration payable over three years. Wipro expects the final payout for Designit to be around 70-105% of the purchase consideration.
Founded in 1991 and based in Copenhagen, Designit is a privately-held design firm that provides technology-led digital product experiences for various brands in segments such as healthcare, telecom, banking, automotive and retail.
In a release, Wipro said, “This investment marks a further stage in Wipro’s move to evolve the digital offer it takes to market, combining its reputation and heritage in deep engineering and transformative technology with human-centred design methods.”
Rajan Kohli, senior vice-president and global head, Wipro Digital, said, “With our acquisition of Designit, we will complement the capabilities of an established design leader with our engineering heritage and bring compelling value to our clients.”
Designit has capabilities in the areas of strategic design, user experience, interaction design and product innovation.
These are expected to complement Wipro Digital’s capabilities in technology, digital strategy, design, and digital architecture.
Kohli said the Designit acquisition is a bet on the future direction on where and how business will be done.
“Today the agenda for a CMO is to see how a product should be designed or consumed in a digital world and a provider who can provides both the design and technology expertise will be the winner,” he added.
Wipro is also expects to generate significant synergistic benefits through this acquisition with opportunities to cross-sell and upsell its various other services.
“We have much of the technology needed, but we need to design the human experience in ways that make sense to us, and for the way we live and work. That’s why design today is so influential and strategic. There’s an endless market for products, services, and systems that need to be simplified and humanised. With Wipro Digital, we can deliver as big as we can dream,” said Mikal Hallstrup, founder and chief visionary officer, Designit.
Wipro in its annual report for FY15 had stated that digital would be significantly in focus for managements keen on improving customer experience and raising productivity.