Wipro acquiring select Yardley business – news that NDTV Profit broke on October 12 is finally official now. Wipro has signed an agreement to acquire some personal care business of Yardley for $45.5 million.
Wipro will be shelling out over $45.5 million for the deal with UK-based Lornamead group, which owns the Yardley brand, for the businesses in Asia, the Middle East, Australasia and some African markets.
However Lornamead Group will retain the Yardley business in Europe and the Americas. Yardley's sales for the current fiscal is expected to be around $24 million.
“It significantly increases our turnover in middle east markets. In India we see as a big potential going forward because it has a small base here. But with Wipro's distribution strength in the India market we should be able to leverage it very well,” said Nagender Arya, regional director at Wipro Consumer Care & Lighting.
But for Wipro, it is not just about the Indian market. After buying Unza Holdings Limited, Singapore-based consumer goods company, two years ago for Rs 1025 crore, it now has an strong presence in far east Asia. Yardley will now give them an easy access to other markets globally.
“Acquisitions do play a big role in accelerating speed to market because you are acquiring a brand and its capabilities to compete in their market as well. So, management team and distribution infrastructure will also come along with that,” said Ashish Nanda, partner at retail & consumer products, Ernst & Young.
And by doing this, Wipro wants its consumer products business to double its sales every three years.
Premji also wants its non IT business to contribute for a quarter of the group's turnover from just 15 per cent now, so that brands like Yardley and Santoor could help them wash away some of its risk from its IT business.