India’s Wipro to acquire MasterCard’s service providers

Wipro, India’s third largest outsourcer, announced Thursday that it has signed a definitive agreement to acquire mPower Software Services, an IT services company in Princeton, N.J., and its development center in Chennai, India.

Wipro, India’s third largest outsourcer, announced Thursday that it has signed a definitive agreement to acquire mPower Software Services , an IT services company in Princeton, N.J., and its development center in Chennai, India.

Focused on the payment systems space, mPower has global payment company MasterCard International of New York as its main customer.

Under the agreement, Wipro will also acquire MPACT Technology Services, a services joint venture in Chennai between MasterCard and mPower.

Wipro will pay $28 million for mPower and MPACT.

MPower and MPACT offer application development and maintenance services to MasterCard, says Sudip Nandy, chief strategy officer of the Wipro Technologies Division.

As a result of the acquisition agreement, Wipro has also signed a multi-year services contract with MasterCard, according to Nandy.

Wipro now plans to sell its other services to MasterCard including infrastructure services, package implementation, business process outsourcing and testing, depending on MasterCard’s requirements, Nandy adds.

As mPower and MPACT were small operations, MasterCard could not grow its outsourcing to the two companies, according to Nandy. “With Wipro they get a partner that can offer multiple service lines, and scale each one of these services as the need arises,” he adds.

“Besides getting the MasterCard business by this acquisition, we also get MasterCard as a strong reference in the payments systems market,” Nandy says. Through the acquisition of mPower and MPACT, Wipro Technologies also gets 300 staff with expertise in the payment space, which will enable it to expand in the financial services market, Nandy says.

The transaction’s closing is subject to customary closing conditions and regulatory approvals, Wipro says. The definitive agreements provide for the acquisition to be effective Dec. 1, 2005, it added.