Wipro divests hosted data centre business for $405 mn

India's third largest IT services provider after TCS and Infosys, Bangalore-based Wipro today said it has signed a definitive agreement to divest its hosted data centre services business to Ensono for $405 million.

Ensone is a leading hybrid IT services provider and offers customised hosting services ranging from cloud to mainframes. It is a portfolio company of Charlesbank Capital Partners and M/C Partners. 

As part of the deal, Wipro will transfer eight data centrer, and over 900 employees of its hosted data centre services business to Ensono.

The acquisition will expand Ensono's geographic footprint and global service capabilities in hybrid IT.

As part of the agreement, Wipro, which  provides comprehensive IT management solutions for large and mid-size enterprises and operates data centres, will invest $55 million in Ensono's combined entity.

Hosted datacentre services business is one of the three businesses that became a part of Wipro when it acquired Infocrossing Inc in 2007. The other two businesses - Medicare and Medicaid services in the health insurance segment and ERP implementation services - have been integrated with other Wipro businesses and are not part of this divestment.

The divestmebt is a part of Wipro's efforts to invest in newer digital areas, its investment and partnership with Ensono will enable it to retain a foothold in hosted data centre services for its customers.

"This partnership will enhance the global data centre footprint and expand the available talent pool, which will give us economies of scale and allow us to offer end-to-end capabilities in the infrastructure space, better than ever before,'' said Kiran Desai, senior vice president, Global Infrastructure Services, a division of Wipro Limited.

Through the acquisition, Ensono will double in size, diversifying its client portfolio and increasing its annualised revenue to increase to over $550 million.

''This is the third acquisition in less than three years for Ensono,"  said Jeff VonDeylen, CEO, Ensono. "This particular acquisition and partnership with Wipro substantially increases our ability to scale and service our growing client portfolio. We are increasing our geographic presence by expanding our data center operations in Germany, UK. and the US, as well as establishing an operational presence in India,''  VonDeylen added.

The acquisition is subject to the usual closing conditions and regulatory approvals and is expected to close in the quarter ending June 2018.