Wipro’s Growth through M&A BPO Case Study

D&B M&A Series
August 28, 2007

Lakshminarayana K R Chief Strategy Officer

Agenda Wipro – An Introduction Wipro’s Approach to M&A Case Study : BPO Business Our Learning from M&A .

Wipro s Wipro’s businesses include the fastest growing Consumer Products company in India & World’s second largest independent p hydraulic cylinders manufacturer 1945 1980 2000 2003 2006 2007 Incorporation of Western India Vegetable Products Limited Wipro enters the IT services business p Business Legacy Wipro listed in the NYSE Enters the league of the 10 IT companies in the world by MCAP Wipro among the World’s Top 25 ‘ h ld’ ‘Most Innovative Companies’ . In addition to IT.BusinessWeek ’ k Premji listed as Greatest Entrepreneurs of all time by Business Week WIPRO in Numbers 3 .Wipro – An Introduction 1. Leading Global Provider of IT Service. BPO and Product Engineering Services 2.

a c a a d Cu tu a an acquisition target. •As the synergy outcome. we focus on two aspects: •Main driver is Growth Acceleration – as measured by Revenue Synergy. •We look at a 3 ay fit: St ateg c. b) feasibility of seed skill-sets and c) competitive market dynamics in target oppty space. to be recovered over finite time. Financial and Cultural in a acqu s t o ta get e oo 3-way t Strategic. •Profitability dilution seen as pure ‘investment’. •Decision of ‘build vs. Transactions are not taken up based on cost take-outs or turn around cases. •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. . buy’ for these ‘Gaps’ taken based on criteria like a) how soon is the market oppty.Our M&A Strategy •M&A is an integral part of our strategic framework framework.

Acquisition Environment & Strategy Model q gy Acquisition Strategy S Integration Approach Acquisition Model Execution Organization CrossFunctional Team Team Members Business Environment Organizational Discipline Serial Acquirer A i In House Full Integration Centralized Dedicated Consistent Core Process Driven One-off Acquirer A i Outsource Minimum Integration Distributed Virtual Project Based Context Ad-Hoc Processes Typical Wipro Profile 5 .

Europe and Americas India.2 billion • • • Acquisitions spread across multiple geos . domains and technologies Some of the IT business acquisitions Some of the Non IT Business acquisitions .India Asia.M&A We Have Done • Cumulatively invested over $1. Asia Over 6000 team members added through acquisitions across the world Broad coverage across businesses. skill sets.

KPI’s.Our Approach to Integration S U C C E S S F A C T O R S TARGET Protect Current Business Momentum Focus on Value creation & business objectives Move swiftly & empower integration leaders Establish Integration Management Team Address C l Add Cultural challenges & diff l h ll differences Focused communication on integration process S U C C E S S F A C T O R S P L A N N I N G E X E C U T I O N Alignment in objectives of Management of Both Companies Operating Structures. Synergy Realization Plans P L A N N I N G When Dominant organizations try to impose their processes & culture to get a quick fix it will end up in disaster E X E C U T I O N The Integration Plan should be completed prior to signing of the Agreement Regular Review Mechanism Clearing house & empowerment to close issues Periodic 360 degree feedback across all stakeholders . Face to market Addressing issues arising out of the DD Process Business Plans.

5 m .Year ended March 2002 • Impressive client profile – 7 global customers Service Offerings .BPO Business – Overview & Strategic Rationale ADDRESSING THE ITES OPPORTUNITY WIPRO SPECTRAMIND OPPORTUNITY: Company overview • Company formed in March 2000 • S Spectramind initially f funded by ChrysCapital C C and HDFC • Set up by team of professionals with combined experience of 267 p p person y years drawn from captive/non-captive • Revenue of $10.

is a fully owned subsidiary of Wipro Limited. With this transaction Wipro Spectramind Services Private Limited transaction. equity shares representing 8% of the equity shares of Wipro Spectramind.Transaction Execution Strategy • • • Wipro invested $10 million for 24% stake (including convertible preference) in October 2001 f )i O t b Wipro entered into agreement to acquire further 66% for $84 million in July 2002 Wipro’s stake in Spectramind went up in aggregate to 90% of all outstanding shareholding and consequent change of name to Wipro Spectramind. • • . p p In January ’03. Wipro acquired from HDFC.

Weaving Wipro BPO into Wipro’s Operational Fabric • Empowered the existing management team & let them continue to manage • Recognized the differences in operations • B ilt a funnel of business with potential t cross sell Built f l fb i ith t ti l to ll • Rapidly integrated functional organizations – Finance. etc. – even as allowed flexibility to suit different business model • Created a team of expert practitioners to aid the Vertical Sales team to sell . HR. IS.

278 15. Poland.22% Enterprise .000+ Seats 148 10 41 95 178 208 30 X 14 Global Delivery Centers 6 1 3 5 6 8 Volume of Work 14 X 51 Customers 500+ Transitions 20.700 5.Results from the Acquisition over 5 years 291 Revenues (in USD Mn) Centers India.300 9X BFSI – 18% TSP .673 Employees 16.15% 51 Clients 7 18 23 24 33 40 Geography Mix US – 75% Europe – 21% ROW – 4% 7X 2005-06 2006-07 2007-08 *E 2001-02 2002-03 2003-04 2004-05 .087 17. China. Romania.837 Employees as on 30 June 2008 18.000 9. US.45% PES . Brazil 20. Mexico. Phillipines.464 Business Mix 2.

Our Learning from M&A • M&A Strategy has to be part of overall strategy. objectives. keep the specific learnings as guiding light” Thank you! . policies and processes b) retaining talent c) building strong go-to-market strategy • “Follow the process. • No two transactions are alike • Integration preparations should start well in advance • Focus of Integration should be on: a) aligning goals.