Indian IT and business process supplier Wipro is eyeing up UK business process outsourcing (BPO) provider Equiniti for acquisition, according to reports.
A takeover of Equiniti, which is expected to be valued at over £1bn, would give Wipro significant private sector customers in the UK, as well as the operation of the My Civil Service Pension (MyCSP) public sector mutual.
MyCSP was announced in 2011 as the first example of a government body spun out into a mutual and partnered with a private sector company. It administers 1.5 million civil servant pensions.
MyCSP is 25% owned by its 475 staff, 35% by the government and 40% by Equiniti, which already looks after almost three million pensions.
Indian IT services provider Wipro was shortlisted to be the private sector partner of MyCSP, but pulled out in the eleventh hour, and Equiniti was the successful bidder.
Sources recently told Computer Weekly that Wipro is outperforming the market and acquisitions are expected. The company was recently flagged as a potential buyer of CSC after the US services firm cut itself in two in a move that would make its sale easier. CSC announced its split into CSC US Public Sector and CSC Global Commercial, with the latter focusing on enterprise and non-US public sector sales.
On the reports of Wipro circling Equiniti, Mark Lewis, outsourcing lawyer at Berwin Leighton Paisner, said: “This would certainly give Wipro good public sector business and also access to large private sector companies in the UK.”
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It would also give Wipro a larger UK workforce, which would help the company win deals in the UK. Indian suppliers are often criticised for not employing enough UK staff despite their large volumes of work in the UK.
India’s biggest IT supplier, Tata Consultancy Services, boosted its UK operation though the acquisition of life and pension outsourcing business from Pearl Group in 2005. TCS then set up Diligenta to help it grow in life and pensions BPO.
Outsourcing consultant Jean-Louis Bravard said this would make sense to Wipro as it is increasingly important to have more staff near customers. This, he said, is because software robots are automating may business processes so there is less need for low-cost offshore staff.
But at the same time there is a need to have staff in close proximity to customers to support them, said Bravard. “Automation makes proximity more important. With more and more services being pushed through mobile devices users need support to be in close proximity for real-time services,” he said, adding that the growth rate of offshored delivery will be lower than onshore outsourcing.