Wipro to divest its cloud business to Alight

Wipro has agreed to divest its Workday and Cornerstone OnDemand business to Alight for a cash consideration of US$110 million. Wipro will receive US$100 million of payout with closure of the deal and the balance US$10 million after 1 year based on various performance parameters. 

Wipro had acquired the Workday and Cornerstone OnDemand business as a part of the acquisition of Indianapolis-based cloud services company , Appirio for US$500 million in 2016. 

The company management said that this move was done to allow the company to focus on their core offerings in which they command a leadership position in the market. The company also reiterated its intentions to make significant investments to grow their cloud applications and platforms business. 
The company is expected to benefit from being a strategic partner for Alight and will gain access to down-stream revenue opportunities. The divestiture would mean that an estimated 350 employees in Workday and Cornerstone OnDemand teams would move to Alight. 

Workday and Cornerstone OnDemand have multiple clients in US, Europe, Middle-East and Africa and will add to Alight’s capabilities in financial solutions and HR service solutions space. 

In July 2018, Wipro had won its largest ever IT outsourcing contract worth US$1.6 billion from Alight Solutions for a period of 10 years. As a part of the deal, the company acquired Alight’s India unit for US$117 million and absorbed 9000 of their employees in the process. 

On Thursday, Wipro was trading at Rs. 375 per share, up 0.41 per cent on the BSE.