Wipro Acquires US Firm Applied Value Tech for $40 Million to Boost Application Services
Wipro’s shares have seen a notable uptick following the announcement of a $40 million deal to acquire the US-based firm, Applied Value Technologies. The deal, expected to be completed by December 31, 2024, is set to enhance Wipro’s application services capabilities and present new avenues for growth.
Wipro’s shares have seen a notable uptick following the announcement of a $40 million deal to acquire the US-based firm, Applied Value Technologies. The deal, expected to be completed by December 31, 2024, is set to enhance Wipro’s application services capabilities and present new avenues for growth.
The acquisition, which will be funded through cash with a deferred earnout contingent on meeting certain performance metrics, marks a significant strategic move for the Indian IT giant. The buyout is expected to reinforce Wipro’s existing portfolio in the enterprise application development sector while opening up opportunities with new marquee clients.
Applied Value Technologies, headquartered in the US, specializes in enterprise application development and support services. The company has witnessed a substantial rise in revenue over the past few years, growing from just $0.8 million in 2021 to $19.4 million in 2023. This growth trajectory highlights the potential value Applied Value Tech could bring to Wipro, especially as both companies operate in the rapidly evolving IT services and solutions space.
Despite the promising prospects, Morgan Stanley has maintained an ‘Underweight’ rating on Wipro, setting a target price of Rs 250 per share. The brokerage firm views the Applied Value Tech acquisition as relatively small compared to Wipro’s previous acquisitions, including Capco in 2021 and Rizing in 2022. Although the acquisition is expected to bolster Wipro’s capabilities and add high-profile clients to its roster, the limited financial impact on Wipro’s overall performance in FY25 and FY26 may not drive substantial changes in the company’s market outlook.
As the global IT landscape continues to evolve, Wipro’s strategic acquisitions, including this latest purchase, are likely to play a key role in its efforts to diversify and strengthen its service offerings. The company’s focus on expanding its application services expertise positions it well for future growth in an increasingly competitive market.
Sources By Agencies
About The Author
