uploads presentations 102 mr. lakshminarayana k r

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Wipros Growth through M&ABPO Case StudyPO Case Study

D&B M&A SeriesAugust 28, 2007

Lakshminarayana K RChief Strategy Officer


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Agenda

Wipro An Introduction

Wipros Approach to M&A

Case Study : BPO Business

Our Learning from M&A


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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


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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.


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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


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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


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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


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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


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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.


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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


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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


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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!

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