Indian outsourcing firm Wipro has announced that it has acquired the IT service arm of Canada’s business conglomerate ATCO and, in addition, bagged a 10-year IT outsourcing services contract.
Alberta-based ATCO I-Tek, the subsidiary that Wirpo bought for $195 million, has been providing IT Services to the parent company for the past 15 years.
Under the terms of the deal, ATCO will transfer to Wipro its 500 employees in Canada and 50 in Australia. The arrangement will add $112 million annually to Wipro’s kitty for the next ten years.
This is a major outsourcing contract for Wipro, following the acquisition of the IT services arm of Science Applications International Corporation for $150 million. The energy and natural resources verticals has been Wipro’s fastest growing division in the past few years, with the sector accounting for 16% of the company’s revenue in the previous fiscal year.
ATCO said it had to sell its IT arm to ease the regulatory “challenges” in Canada’s utility sector. Outsourcing the IT services would help the company address the concerns expressed by the Alberta Utilities Commission, ATCO stated.
“This alliance ensures ATCO can focus on growing our core businesses of structures and logistics, utilities, and energy while partnering with Wipro for strategic, innovative IT solutions required to support our global operations,” said Brian Bale, Senior Vice-President & Chief Financial Officer, ATCO.
For Wipro, the deal gives a foothold in the energy and utility sectors of Canada and Australia. The Indian firm has several clients in this vertical in Europe.
ATCO I-Tek offers systems integration and also operates a SAP practice, along with mobility, voice, data, security, disaster recovery and managed infrastructure from its data centers across the world.
“The alliance with ATCO enhances our capability to create, nurture and tap local talent to power our growth journey in Canada,” said Anand Padmanabhan, Wipro’s chief executive, energy, natural resources and utilities.