Aside from delivering end-to-end transformation services for Olam Group’s ‘farm-to-fork’ operations, the IT firm will also be acquiring Mindsprint, Olam’s IT arm, for $375 million in an all-cash deal, a release stated.
IT major Wipro on Monday has announced an eight-year transformation contract with Singapore-based food and agri-business Olam Group, that is expected to be valued at more than $1 billion, with a committed spend of $ 800 million.
Aside from delivering end-to-end transformation services for Olam’s ‘farm-to-fork’ operations, the IT firm will also be acquiring Mindsprint, its IT arm, for $375 million in an all-cash deal, a release stated.
Wipro’s strategic transformation
The deal, which is notably one of Wipro’s biggest strategic transformation contracts comes at an opportune time just as Indian IT services are staving off disruptions to their business models triggered by AI tools even as the West Asia war stretches on.
Wipro shares went up by 3.1% after the deal announcement, as did stocks of other IT majors including Infosys (+1.5%), TCS (+1.2%), HCL Tech (+1.4%), all of which gained.
Olam Group generates over $50 billion in overall business volume and specialises in sourcing, processing and distributing spices, cocoa, nuts globally. Wipro will leverage its unified suite of AI-powered platforms and services, Wipro Intelligence to optimise areas including farming, forecasting, trading, supply chain operations and customer engagement at Olam and improve efficiencies and help scale.
How is the mindsprint deal different?
While IT majors have adopted acquisitions wholeheartedly as a growth strategy, the Mindsprint deal is different from the ilk of usual agreements involving service providers, (as was seen late in March with the $465 million deal between Infosys and Optimum Healthcare IT).
“Large transformation deals where the IT firm acquires the captive were quite common. Under the terms of bigger contracts, a part of the incumbent company’s IT staff was absorbed by the new company or the full-captive was taken in, in a practice known as rebadging,” Pareekh Jain, CEO and lead analyst at Pareekh Consulting and EIIRTrend explained.
“This was notably done by Infosys with Danske Bank in 2023 when the IT firm acquired Danske’s IT centre in India while acting as a strategic partner to accelerate digital transformation at the client,” he said.
Mindsprint, employs around 3,200 people primarily based out of India and will now become a wholly owned subsidiary subject to regulatory approvals, with closure expected by the end of June. Interestingly, Olam rebranded Olam Information Services, which was the GCC for the group as Mindsprint, a separate entity, back in 2023.
Regardless of the type of acquisition, Indian IT firms are clearly keen to gain technical proficiency of valuable sectors by the quick way of acquisitions. “Domain expertise is the new currency because every player will eventually have the same AI technology. It is very hard to deploy AI without understanding the business model of a specific sector.
Mindsprint brings us understanding of one of the fastest-growing sectors currently. The deal will boost our incremental revenue over 8 years while capping the downside and gives long-term stickiness. Besides, Mindsprint will also help us win more deals in the long-term from the agri-business sector,” a source from the company explained while requesting to remain unnamed.
Analysts have echoed the sentiment saying the impact of the deal is two-fold and will help expand Wipro’s GCC footprint while also strengthening its presence in the food processing vertical through the addition of industry-specific IP and domain know from Mindsprint. “The advantage is that they can reuse the workforce and IP to expand this vertical,” Namrata Dharshan, chief business officer at ISG India shared.
The deal also demonstrates that GCCs are increasingly considering ecosystem partnerships, smart outsourcing, co-creation versus contracting and build-versus-buy decisions. “In our view, most India-based GCC leaders recognise the reality of the situation: talent is too constrained and cost pressure is too high to not engage service providers in their operations,” she went on. She also revealed that more than 80% of India-based GCC leaders are open to engaging a new service provider over the next two years which could spur another flurry of GCC-targeted acquisitions in the sector.
Jain agreed with the assessment saying, “Such acquisitions are few and far in between but GCCs have always been looked at seriously in this regard. We will see many more such transactions involving GCCs and IT subsidiaries in future,” he added.
Analysts also noted that the considerable scale of the Olam deal showed Wipro’s focus on larger, transformation-oriented engagements which can support its positioning in future large-scale and transformation-led opportunities. The last instance of Wipro signing a deal of a similar scale was with the German wholesaler Metro AG back in 2020.
“As enterprises look for more cost savings, technology and operating model transformation are increasingly the levers for large deals, and longer deals happen. The duration for every deal size band was increasing. What we’re seeing now is that longer durations are happening more often in the large deals in the market. We believe this is yet another indicator that optimisation continues to be the primary driver of growth in the market. In addition, transformation takes time and thus, deal durations are also increasing,” Dharshan theorised.
In FY26, Tata Consultancy Services, Infosys and Cognizant have all signed mega deals with Infosys topping the list in terms of deal valuations with a massive $1.6 billion 15-year deal with the UK NHS for healthcare IT transformation.