Page 41 - IACC Newsletter August-September 2013 Issue 13

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India’s Investments in U.S
Wipro bags $100 million deal from US Company
Software services provider Wipro has won a $100 million (Rs 680 crore) technology outsourcing contract from a United
States-based healthcare services company, according to people with direct knowledge of the development. The
contract, spread over five years, will require the Bangalore-based company to provide infrastructure management
including consolidating the client's multiple data centres.
In June, Wipro had won another large contract, valued at around $500 million (Rs 3,400 crore) from Citigroup as well as
another $100 million contract from a healthcare services provider during the April-June quarter. A company
spokesperson said that Wipro does not comment on market speculation.
The company has been lagging the industry for nearly two quarters but has given a robust growth forecast for the July-
September period, after reporting flat sales during the just-concluded quarter.
Under chief executive TK Kurien, Wipro has been increasing its focus on sales to win large contracts from new clients.
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Allcargo ventures into US, buys Logistics Company for $50 million
Allcargo Logistics has bought US-based Econocaribe Consolidators for about $50 million ( Rs 312.25 crore), an acquisition
that enables the Indian firm to enter the North American market, pushing its share price up as much as 13% on the BSE.
The buyout gives Allcargo the much-needed access to the world's largest economy, and many big clients.
Econocaribe Consolidators is one of the largest non-vessel operating common carriers (NVOCC) in US, with 9 offices in
the country and 22 receiving terminals in the US and Canada. The deal, Allcargo's seventh acquisition in the last eight
years, is expected to immediately add to its earnings.
Econocaribe, the revenue of which grew 15% last year, is a zero-debt company. Operators like Econocaribe don't own
vessels but buy space in other logistics companies to ship cargo. They are more resilient to economic slowdowns.
"When we don't have a presence in the US, many customers don't want to work with us. There are many global
customers who want one company to serve all their requirements," said Shashi Kiran Shetty, executive chairman of
Allcargo.
With this buyout, Allcargo, a part of the Avvashya Group, can now tap the US business of big logistics companies like DHL
and UPS, the company said. Allcargo already serves these companies elsewhere in the world. Allcargo expects that with
the addition of new clients, volume in and out of the US will grow, aiding overall profitability. The acquisition also gives
Allcargo a share of the growing trade within the Americas.
Even though the deal comes at a time of severe economic slowdown in India, Shetty is not too worried as slowdown is a
thing of the past for most of the developed economy. "The option for us was to build or buy. Although it is a large
amount we are paying, we are comfortable. And we have a platform to operate from day one."
Allcargo's appetite for acquisitions is not over yet. The company, in which private equity firms such as Blackstone, New
Vernon and Acacia own about 23 %, is in advanced negotiations to buy a company with presence in Australia and Europe
in the next two months. Shetty declined to share more details on the acquisition.