Wipro Acquires Appirio
Financial Terms
- Total transaction size: $500 M, percent acquired: 100%
- EV/Revenue 2.5x
Transaction Highlights
- On October 20, 2016, Wipro Ltd signed a definitive agreement to acquire Appirio Inc for $500 million.
- Wipro acquired Appirio to augment its cloud implementation capabilities in Salesforce and Workday, two of the fastest growing cloud technology platforms for the enterprise.
- Wipro’s current TEV/Total Revenue is 2.0X. However, Wipro was willing to pay extra premium for cloud talent and intelligence property of Apprio, with a revenue multiple of 2.5X. This indicates the willingness of India-based large IT services companies paying a premium for the right transactions.
- This announcement comes on the heels of Accenture’s acquisition of DayNine on September 26, 2016 to almost double Accenture’s WorkDay Practice. DayNine was widely regarded as the top Workday Cloud Implementation Company (CI).
- While Accenture went for a pureplay CI, Wipro chose one with a more diversified offering. However, Salesforce and Workday have no conflicting offerings today. Market leadership and relative size continue to remain important.
- In the past 5 years, Both Appirio and Wipro have actively grown through M&A transactions. After the largest acquisition of Infocrossing in 2007 for $568M, this is Wipro’s second largest acquisition. Appirio acquired Coderbits, TopCoder, Inc, and Knowledge Infusion LLC in 2014, 2013, and 2012 respectively. It had raised over $100M in venture capital as well.
Appirio and Wipro will unlock transformational synergies together
- Wipro will consolidate its existing cloud applications practices of Salesforce and Workday under the Appirio brand and structure. Chris Barbin, current CEO of Appirio, will lead the expanded business.
- Wipro’s future-step acquisition also includes Appirio’s crowdsourcing platform Topcoder. Today the Topcoder platform hosts a community of 1M+ designers and developers. This leverages the concepts advocated initially by eLance (now Upwork after merging with oDesk) but in an enterprise setting. It provides a snapshot of the changes that are occurring in services businesses today as they evolve to serve evolving technology and markets.
Recent TMS-Related Transactions
| Date | Buyer | Target | EV ($mm) | Notes |
|---|---|---|---|---|
| 02/11/16 | Wipro Ltd | HealthPlan Holdings, Inc | 460 | HealthPlan Holdings is an independent third party administrator, and offers business process outsourcing. |
| 05/15/14 | Appirio Inc | Coderbits | $55.00 | Coderbits builds up-to-date portfolios for developers and designers from sites they use to showcase their skills, expertise, traits, code, designs, education, and more |
| 09/17/13 | Appirio Inc | TopCoder, Inc | 60 | TopCoder, Inc. operates an online design and development community, which gathers experts in design, development, and data science to work on problems. |
| 10/08/12 | Appirio Inc | Knowledge Infusion LLC | $249.90 | Knowledge Infusion operates as a human resources consulting company. The company also offers subscription-based consulting services for HR and IT leaders through a cloud-based platform. |
