-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
1/12
Wipros Growth through M&ABPO Case StudyPO Case Study
D&B M&A SeriesAugust 28, 2007
Lakshminarayana K RChief Strategy Officer
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
2/12
Agenda
Wipro An Introduction
Wipros Approach to M&A
Case Study : BPO Business
Our Learning from M&A
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
3/12
Wipro An Introduction
1. Leading Global
Provider of IT
Service, BPO and
1945 1980 2000 2003 2006 2007Incorporation ofWestern India Vegetable Products LimitedWi ro enters the IT services business
ro uc
EngineeringServices
2. In addition to IT,
k
Wipro listed in the NYSEEnters the league of the 10 IT companies in the world by MCAP
BusinessLegacy
businesses
include the fastest
growing
Wipro among the Worlds Top 25 Most Innovative Companies - BusinessWeekPremji listed as Greatest Entrepreneurs of all time by Business Week
Products company
in India & Worlds
second largest
inde endent
WIPRO inNumbers
hydraulic
cylinders
manufacturer
3
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
4/12
Our M&A Strategy
.
We carry-out an exercise of Gap-Analysis of Where We Are Where we want
to be in light of Market Oppty as part of our 3-year rolling Strategy exercise
every year.
Decision of build vs. buy for these Gaps taken based on criteria like
a) how soon is the market oppty,
b) feasibility of seed skill-sets and
c) competitive market dynamics in target oppty space.
As the synergy outcome, we focus on two aspects:
Main driver is Growth Acceleration as measured by Revenue Synergy.
Transactions are not taken up based on cost take-outs or turn around
cases.
Profitability dilution seen as pure investment, to be recovered over finite
time.
We look at a 3-wa fit: Strate ic Financial and Cultural in an ac uisition tar et.
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
5/12
Acquisition Environment & Strategy Model
AcquisitionS SerialA i One-offA itrategy Acquirer AcquirerIntegrationApproach In House Outsource
Acquisition Model Full MinimumAcquisition Model Integration IntegrationExecutionOrganization Centralized Distributed
Cross- Dedicated VirtualFunctional Team Dedicated VirtualTeamMembers Consistent Project Based
Business Core ContextEnvironment Core ContextOrganizationalDiscipline ProcessDriven Ad-HocProcesses
5Typical Wipro Profile
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
6/12
M&A We Have Done
Cumulatively invested over $1.2 billion
- , ,
Over 6000 team members added through acquisitions across the world
Broad coverage across businesses, skill sets, domains and technologies
Some of the IT business acquisitions
Some of the Non IT Business acquisitions
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
7/12
Our Approach to Integration
TARGETUCCE
FACTO Protect Current Business MomentumEstablish Integration ManagementTeam
Add C l l h ll & diff
SUCCE
FACTOSS
ORS
Address Cultural challenges & differencesFocused communication on integration process
ocus on Value creation & business objectivesMove swiftly & empower integration leaders
P Alignment in objectives of Management of Both Companies P
ESS
ORS
LANNING
Alignment in objectives of Management of Both CompaniesOperating Structures, Face to market
Business Plans, KPIs, Synergy Realization Plans
LANNING
Addressing issues arising out of the DD Process
Regular Review Mechanism
G G
When Dominantorganizations try toimpose their processes &culture to get a quick fix itThe Integration Planshould be completedprior to signing of the
EXEC
EXECClearing house & empowerment to close issuesPeriodic 360 degree feedback across all stakeholdersculture to get a quick fix it
will end up in disasterprior to signing of the
AgreementCUTION
CUTION
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
8/12
BPO Business Overview & Strategic Rationale
:
Company overview
Company formed in March 2000
Spectramind initially funded by ChrysCapital
and HDFC Set up by team of professionals with combined
ex erience of 267 erson ears drawn from
captive/non-captive
Revenue of $10.5 m - Year ended March 2002
Impressive client profile 7 global customers
Service Offerings
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
9/12
Transaction Execution Strategy
Wipro invested $10 million for 24% stake (including convertible
pre erence n c o er
Wipro entered into agreement to acquire further 66% for $84
million in July 2002
Wipros stake in Spectramind went up in aggregate to 90% of all
outstanding shareholding and consequent change of name to
Wi ro S ectramind.
In January 03, Wipro acquired from HDFC, equity shares
representing 8% of the equity shares of Wipro Spectramind.
,is a fully owned subsidiary of Wipro Limited.
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
10/12
Weaving Wipro BPO into Wipros Operational Fabric
Empowered the existing management team & let them continue tomanage
Recognized the differences in operations
Built a funnel of business with potential to cross sell
Rapidly integrated functional organizations Finance, HR, IS, etc.
Created a team of expert practitioners to aid the Vertical Sales team
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
11/12
Results from the Acquisition over 5 years
Centers
India, China, Phillipines, Romania,Poland, US, Mexico, Brazil
20,837 Employees as on 30 June
Revenues(in USD Mn) 95
148178 208
41
291
1030 X
Volume of Work
18,000+ Seats
GlobalDeliveryCenters
3 56 8
14
6
1
Business Mix
51 Customers
500+ Transitions
15,673 16,087 17,464
20,278
BFSI 18%
TSP - 22%
Enterprise - 45%
PES - 15%
Employees 9,3005,0002,700 9X
Geography Mix
US 75%
Europe 21%
ROW 4%
Clients18
23 2433
51
40
7 7X
2005-062004-052003-04 2006-07 2007-082002-03
* E
2001-02
-
8/3/2019 Uploads Presentations 102 Mr. Lakshminarayana K R
12/12
Our Learning from M&A
M&A Strategy has to be part of overall strategy. No two transactions are alike Integration preparations should start well in advance Focus of Integration should be on:
a) aligning goals, objectives, policies and processesb) retaining talentc) building strong go-to-market strategy
Follow the process, keep the specific learnings as guiding light
Thank you!