US-based Alight Solutions to buy two Wipro cloud units for $110 mn
Wipro Ltd, India's third-largest software services exporter, has agreed to sell two of its cloud-based businesses to US-based Alight Solutions LLC for up to $110 million (Rs 784 crore).
Bengaluru-based Wipro said in a statement it will divest the Workday and Cornerstone OnDemand businesses that it had acquired as part of its buyout of US cloud services company Appirio in 2016 for $500 million.
Wipro said Alight will pay $100 million at closing and the remaining at the end of 12 months based on the achievement of performance targets.
This is the second deal between the two companies. In July last year, Wipro had agreed to acquire Alight HR Services India Pvt. Ltd, the local arm of Alight Solutions, for $117 million (Rs 800 crore).
Workday is cloud-based financial management and human capital management software while Cornerstone OnDemand is a cloud-based learning and talent management software.
The sale will result in about 350 employees in Wipro's Workday and Cornerstone OnDemand teams moving to Alight. The business has multiple customers across the US, Europe, West Asia, Africa and India, and posted revenue of $49.7 million for 2017-18, or 0.6% of Wipro's consolidated revenue.
Wipro said it will continue to focus on its cloud applications and platforms including growing its Salesforce business under the Appirio brand. It will also support Workday's suite of solutions for application management, testing and integration services for existing clients.
"This agreement will enable Wipro to sharpen its focus on key offerings where it has a leadership position in the market. We will continue to make significant investments to grow our cloud applications and platforms business," said Wipro CEO Abidali Z. Neemuchwala.
Alight CEO Chris Michalak said the acquisition enhances both the depth and breadth of its human capital management solutions, one of its fastest-growing businesses.
The transaction is subject to receipt of regulatory approvals and customary closing conditions and is expected to close during the quarter ending March 31 , 2019.