Views on Wipro to acquire Cellent AG a leading IT consulting and Software Services company in Germany: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - IT, Angel Broking):

Wipro to acquire Cellent AG a leading IT Consulting and Software Services company in Germany

Wipro announced that it has signed an agreement with Landesbank Baden-Wuerttemberg (LBBW) to acquire Cellent AG for 73.5mn Euros. Cellent AG is a leading IT consulting and software services company and has been offering holistic innovative IT solutions and services to its customers in the DACH region of Germany, Austria and Switzerland for the past 14 years.

Cellent AG serves the DACH market region with a team of more than 800 consultants, who will now become part of Wipro. The company had sales of 87mn Euros. Though the profitability of the acquired business is not available, we believe that the acquisition doesn't look prima facie an expensive acquisition and should be EPS accretive. The funding should not be a problem, as the company has significant resources.

The DACH market is a strategic growth and investment region for Wipro. These acquisitions will Provide Wipro with significant scale and prime customer relationships, especially in the Manufacturing and Automotive domains, which are key industry sectors in the DACH region. Our rough estimates suggest that the acquisition can increase by 0.6% for full year EPS We maintain our BUY rating with a price target of INR 719.

Shares of WIPRO LTD. was last trading in BSE at Rs.566 as compared to the previous close of Rs. 565.4. The total number of shares traded during the day was 29808 in over 1326 trades.

The stock hit an intraday high of Rs. 567.95 and intraday low of 560. The net turnover during the day was Rs. 16811766.

Source : Equity Bulls

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