The Hindu Business Line : WeP buys Select Tech from Thailand group

WIPROEPERIPHERALS (WeP), which started as a division of Wipro and was spun off as a separate company three years back, has acquired Select Technologies, part of Thailand-based-GP group.

WeP holds a majority stake and targets to acquire over 80 per cent in the company, according to Mr Ram N Agarwal, Managing Director and CEO. The company had earmarked around Rs 6 crore to be invested in this area, he said.

WeP has outlined a strategy of growth through acquisitions and had earlier acquired EDM, Godrej's printer manufacturing unit in Hyderabad. In a unique acquisition model, Select will continue to be a legal entity, though the GP group will have no stake left.

The rest of the equity will be with Select's top management. The company plans to buy up more equity from the management, making sure that as and when it happens, the Select management "takes the upside," Mr Agarwal said.

Select, which has been in India for around three years, has built up expertise in networking and network security. The acquisition is in keeping with WeP's declared strategy of playing in the communications, storage and personal mobility and convenience space. WeP will also move its own networking and storage business to Select to bring everything under one entity.

Select's technical expertise will combine with WeP's reach in the country (it has 12,000 resellers) to grow the business at a CAGR of 60 per cent for the next two years to around Rs 50 crore.

As of today, the total networking business amounts to Rs 20 crore (including Rs 12 crore from Select). Mr Agarwal likened WeP's strategy to that of GE. "GE has acquired over 2,000 companies, most of which are unknown," he said. "Our idea is to acquire companies for the strategic growth direction that they can give us."

The 40 odd Select employees will continue to be with the company. No fresh recruitments are on the cards. "The acquisition will be structured like the previous one, using existing resources," Mr Agarwal said.

When EDM was acquired, employees were not laid off, but were used to grow business by nearly 80 per cent, he added.

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
BSNL, MTNL get nimble to take on competition — Procurement policies to be overhauled

WeP buys Select Tech from Thailand group

Innosoft Tech plans tie-up with 2 US cos

India is more than a market for me: Gates

SMEs have key role in domestic market, says Nasscom chief — `Push to hardware, language software urgent'

TN Govt working on e-Seva project

IT services spend to grow at 12.4 pc

2,000 new ITES jobs in Bangalore a month

Observing quality month