To bolster business in the financial sector.
By Deepak Chitnis
WASHINGTON, DC: Indian IT giant Wipro has entered into an agreement to acquire the US-based mortgage firm Opus Capital Markets Consultants for a sum of $75 million (Rs. 465 crore).
Opus has been acquired by Wipro to bolster its support capabilities for clients in the financial sector, since Opus deals with such things as corporate risk management, due diligence, valuation services, and data analysis, among other services.
Although Wipro maintains highly competitive with its other IT counterparts, namely Tata Consultancy Services, it has lagged in the area of revenue growth largely because it doesn’t cater as forcefully to financial sector clients – the Opus purchase is therefore seen as a big step in that direction by India number three IT company.
In a joint statement announcing the purchase of their company, Opus co-founders Joseph Andrea and Jennifer LaBud said that the “industry is at a pivotal point with the introduction of new mortgage regulations driven by the [Consumer Financial Protection Bureau] and government agencies,” and that the acquisition will mean that both companies can now “jointly assist our clients in navigating this challenging and changing business environment.”
The acquisition will add all of Opus’s 490 employees to Wipro, as well as its 315 loan underwriters that currently work in five centers across the United States. The company was founded in 2005 and is based in Lincolnshire, Illinois, just over 30 miles north of Chicago.
Wipro senior vice-president and head of business process outsourcing said in a separate statement that the combination of Wipro and Opus will create “end-to-end offering for all mortgage players, with a greater degree of automation and application of analytics.”
This is not Wipro’s sole large-scale acquisition of 2013, however. In May, the company purchased a minority stake in Opera Solutions, a worldwide analytics company, for $30 million (Rs. 162 crore), signaling even then that Wipro was committed to expanding in the mortgage arena.
The deal to acquire Opus will go into effect sometime in the first quarter of 2014, after regulatory approvals and other procedural closing conditions are granted and met.
To contact the author, email to deepakchitnis@americanbazaaronline.com