Wipro, India’s third largest IT services exporter, has finally divested its data centre services business, which was primarily located in the United States, for $405 million to Delaware-based Ensono.
Wipro, India’s third largest IT services exporter, has finally divested its data centre services business, which was primarily located in the for $405 million to Delaware-based Ensono. In a notice to the stock exchanges on Wednesday, the company said, “Wipro will unlock value by transitioning eight data centers, and over 900 employees of its hosted data centre services business to Ensono.” As part of the agreement, Wipro will also make a strategic investment of $55 million in Ensono’s combined entity. Wipro forayed into the hosted data centre services business through the acquisition of Infocrossing in 2007 for $600 million. The data centre business of Wipro is primarily located in the US with a portion in Germany and the UK. It also has certain employees who are based in India, supporting this business. Wipro’s data centre business reported a standalone revenue of $241 million in FY17 and accounted for 2.9% of the consolidated revenues. “With this divestment, Wipro is unlocking a significant value from its hosted data centre services business to Ensono. It will help Wipro to focus on accelerating investments in the digital space,” the notice to the exchanges said.
According to Wipro, the hosted data centre services business was one of the three businesses that became a part of the company when it acquired Infocrossing. The other two businesses — medicare & medicaid services in the health insurance space, and ERP implementation services — have been integrated with other Wipro businesses and are not part of this divestment. “As we embrace our strategy of focusing on newer digital areas of spend, our strategic investment and partnership with Ensono will enable us to remain committed to meeting the hosted data centre services requirements of our customers,” said Kiran Desai, senior vice-president, Global Infrastructure Services, Wipro. The divestment by Wipro to Ensono enables the latter’s expansion in terms of geographic footprint and service capability. Ensono, a portfolio company of Charlesbank Capital Partners and M/C Partners, was incorporated in 2015 and registered a revenue of $285 million for the year ended December 2017.
Through the acquisition, Ensono is doubling in size, diversifying its client portfolio and increasing its annualised revenue to over $550 million. “This is the third acquisition in less than three years for Ensono. This particular acquisition and partnership with Wipro substantially increases our ability to scale and service our growing client portfolio. We are increasing our geographic presence by expanding our data centre operations in Germany, the UK and the US, as well as establishing an operational presence in India,” said Ensono CEO Jeff VonDeylen.