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Wipro to buy Infocrossing for $600 m

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CIOL Bureau
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BANGALORE, INDIA: Wipro Ltd has announced that it has entered into an agreement to acquire US-based Infocrossing Inc. and its subsidiaries, in an all cash deal of $18.70 per share, totalling $600 million.

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Nasdaq-listed Infocrossing is an outsourcing solutions company with its headquarters in Leonia, New Jersey.

The acquisition is subject to consents and approval from statutory authorities and also subject to approval of the shareholders of Infocrossing. The acquistion will be conducted by the means of a tender offer for all of the outstanding Infocrossing shares, followed by a merger of Infocrossing with a Wipro Subsidiary. The acquistion is expected to close by the fourth quarter of 2007-08.

"Wipro Technologies has identified global infrastructure services as an important driver of growth for the company and is pleased to add Infocrossing, which provides integrated managed infrastructure services to premier global clients." said Suresh Vaswani, president, Global IT Service lines, Wipro.

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"Total outsourcing Services, which include our IT infrastructure services, grew 75 per cent in the past year proving global clients are increasingly realizing the value of these services. This acquisition of an acknowledged industry leader broadens the data center and mainframe capabilities of Wipro Technologies to uniquely position us in the remote infrastructure management space. Through Infocrossing we are deepening our presence in the United States with the addition of five data center locations and approximately nine hundred employees," he added.

Sudip Banerjee, President Enterprise Solutions of Wipro Technologies added, "With its unique platform-based solutions, Infocrossing also brings in significant expertise in Health plan and Payer Management segments. With its proven track record of processing over 175 million claims annually and providing contracted services to over 90 managed care organizations, Infocrossing will considerably enhance Wipro's ADM and BPO offerings to our Healthcare customers."

The global IT infrastructure market has been projected to be $150 billion and the global market opportunity for remote infrastructure management services has been predicted to reach $70 billion, according to industry association Nasscom.

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Infocrossing's expertise in hosted and managed IT infrastructure services will enhance Nasdaq-listed Wipro's current service offerings. The company operates five data centers in the United States and provides a full portfolio of infrastructure management solutions, including server management, mainframe outsourcing, network management and security services.

For the twelve months ended March 31, 2007, Infocrossing had revenues of $232.4 million and net income of $9.3 million.

Wipro was advised on the transaction by Citigroup and represented by the law firm of Wilson Sonsini Goodrich and Rosati, and Infocrossing was advised by Credit Suisse Securities (USA) LLC and represented by the law firm of Gibson, Dunn & Crutcher LLP.

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