Wipro Ltd., India's third largest outsourcer, announced Thursday that it has signed a definitive agreement to acquire mPower Software Services Inc., an IT services company in Princeton, New Jersey, and its development center in Chennai, India.
Focused on the payment systems space, mPower has global payment company MasterCard International Inc. of New York as its main customer.
Under the agreement, Wipro will also acquire MPACT Technology Services Pvt Ltd., a services joint venture in Chennai between MasterCard and mPower.
Wipro will be paying US$28 million in cash for both mPower and MPACT.
MPower and MPACT offer application development and maintenance services to MasterCard, said Sudip Nandy, chief strategy officer of the Wipro Technologies Division of Wipro Ltd. in Bangalore, India.
As a result of the acquisition agreement, Wipro has also signed a multi-year services contract with MasterCard, according to Nandy.
Wipro now plans to sell its other services to MasterCard including infrastructure services, package implementation, BPO (business process outsourcing) and testing, depending on MasterCard's requirements, Nandy added.
As mPower and MPACT were small operations, MasterCard could not grow its outsourcing to the two companies, according to Nandy. "With Wipro they get a partner that can offer multiple service lines, and scale each one of these services as the need arises," he added.
"Besides getting the MasterCard business by this acquisition, we also get MasterCard as a strong reference in the payments systems market," Nandy said. Through the acquisition of mPower and MPACT, Wipro Technologies also gets 300 staff with expertise in the payment space, which will enable it to expand in the financial services market, Nandy said.
The transaction's closing is subject to customary closing conditions and regulatory approvals, Wipro said. The definitive agreements provide for the acquisition to be effective Dec. 1, 2005, it added.
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