Apr 24, 2003 (12:04 PM EDT)
India's Wipro Buying U.S. Software Firm
Read the Original Article at InformationWeek
BANGALORE, India (AP)--Indian technology firm Wipro, which earns more than 60% of its software income from the United States, said Thursday it plans to acquire the U.S.-based financial software company NerveWire Inc.
Wipro will pay approximately $18.7 million for the firm to strengthen its presence in the United States.
NerveWire in Newton, Mass., sells technology and business advice to customers in manufacturing, high-technology, and financial industries. Clients include Cisco Systems and Comerica Bank, according to the company's Web site. NerveWire is privately held.
"The team of 90-plus consultants from NerveWire brings in deep domain knowledge and strong customer relationships" with its 40 clients, said Girish Paranjpe of Wipro's software division, Wipro Technologies.
"We believe this acquisition will be a strong catalyst for growth," he said.
Indian software firms position themselves as low-cost subcontractors in the global market to beat their Western competitors. But Indian firms also started to buy Western software companies, giving them better brand recognition and enabling them to charge higher fees.
Paranjpe did not divulge the difference in the rates charged by Wipro and NerveWire.
Such acquisitions have also become necessary for Indian firms trying to win a slice of the U.S. market, because some American firms will not place software orders to foreign companies.
"With this transition ... we will enhance the value that we offer to our clients," a Wipro statement quoted John Plansky, NerveWire's president and chief executive.
Wipro, whose business includes software, hardware, health services, and consumer products, reported net profit for the January-March quarter of 2.25 billion rupees ($47.5 million), down 2.5% from 2.31 billion rupees in the same period last year.
Wipro Technologies, the software division, expects to report revenue of $172 million for the April-June quarter.