April 6 (Reuters) - Shares of Wipro rose as much as 3.2% on Monday after the Indian IT services firm agreed to buy the IT services business of Singapore-based Olam Group for an enterprise value of $375 million.
The stock was last up 1.9% at 9:34 a.m. IST, making it the top gainer on the IT index, which was trading 0.5% higher. It was also the second-biggest gainer on the benchmark Nifty 50, which was down 0.2%.
Olam Holdings, a unit of the Singapore food and agribusiness conglomerate, will sell 200 million ordinary shares of Mindsprint, its IT and digital services arm, to Wipro Networks, a unit of Wipro, Olam said in a statement on Monday.
Mindsprint provides technology, cybersecurity and digital services across sectors including food and agribusiness, manufacturing, retail and consumer packaged goods, as well as healthcare and life sciences.
Analysts at ICICI Securities said the transaction is Wipro’s largest acquisition to date and improves revenue visibility while strengthening Wipro’s consulting, platform and industry-specific capabilities in the food and agribusiness vertical.
The deal would add domain expertise, IP-led platforms and a captive delivery relationship, making the engagement more strategic and sticky than a traditional outsourcing arrangement, the brokerage said.
Olam has also awarded Wipro an eight-year services contract with a committed annual spend of $100 million, which Wipro said is expected to exceed $1 billion in total contract value.
Wipro’s shares are now down 24.5% year-to-date, compared with a 19.2% decline in the IT index.
(Reporting by Kashish Tandon and Sherin Sunny in Bengaluru; Editing by Sumana Nandy)
