Wipro snaps up ITI

This is a really big deal: Wipro has signed a definitive agreement to acquire International TechneGroup Incorporated (probably better known as ITI), maker of the interoperability solutions that make the PLMish world possible. I saw the news from the Economic Times of India, which put the acquisition price at around $45 million; the companies’ material didn’t have price details.

Very few companies and supply chains use just one CAD, PLM or CAE solution. ITI makes the interconnecting bits that migrate data, connect CAD to CAD, and CAD to CAE, and … well, most things to most other things in our world. If you’re in PLM, you’ve relied on an ITI product, whether you knew it or not.

Wipro said that ITI’s products “will be consolidated as a part of Wipro’s Industrial & Engineering Services business and will function as a wholly-owned US subsidiary of the company. Wipro’s Industrial & Engineering Services provides customers with a platform to innovate and engineer the next generation of products and platforms at scale, using an approach termed as ’EngineeringNXT’.”

Harmeet Chauhan, Senior Vice President, Industrial & Engineering Services, at Wipro Limited said in the press release, “As enterprises innovate and invest in ‘EngineeringNXT’, they are looking for ways to build a Digital Thread across design, engineering, and manufacturing. This acquisition complements Wipro’s core strengths in Industry 4.0 and allows us to offer end-to-end solutions in Digital Engineering and Manufacturing. We are pleased to welcome ITI’s employees and are confident that their unique offerings and solutions will add value to our organization.”

ITI CEO Tom Gregory said, “Our customers and employees will benefit from the synergies of ITI and Wipro’s combined portfolio of offerings. Clients will gain access to Wipro’s global services and ITI’s innovative solutions to accelerate the adoption of digital manufacturing initiatives. We are pleased to become a part of the Wipro family.”

The Economic Times of India article said that ITI has around 130 employees and had revenue of “$23.2 million, $22.2 million and $19.6 million, respectively in FY18, FY17 and FY16” (with a fiscal year that ends June 30). If this and the purchase price details are correct, this is about a 2x revenue multiple. (Perhaps Wipro held an investor conference call in India; I’ll try to find out and listen in, if I can.)

The acquisition is subject to regulatory approvals and is expected to close by September 30, 2019.

What does it mean? The ITI guys have been an awesome bridge between A and B for 35 years. Sometimes being a Switzerland was easy, sometimes not. It saddens me to see another independent gobbled up, but the reality is that it’s sometimes easier to make and sell product when part of a bigger enterprise. From Wipro’s perspective, it makes sense, too: As Wipro’s Mr. Chauhan said, manufacturers (and others) need to tie together all of their innovation engines — and ITI has proven that it’s at the core of of many of the approaches to do this.

The announcement doesn’t say what happens to ITI’s commercial relationships with PLMish vendors and users. I’ve asked Wipro for a comment and will update once I hear back.