Wipro Technologies has agreed to acquire Citi Technology Services (CTS), the India-based information technology services and solutions provider owned by financial services provider Citi.

Under the $127m (£86.3m) deal, the two firms have also signed an agreement for the delivery of technology infrastructure and application development and maintenance services for six years. The agreement is expected to generate around $500m in service revenues over that period.

Citi Technology Services is based in Mumbai and Chennai and employs around 1,650 staff servicing the bank’s offices in over 32 countries. Apart from its core focus area of technology infrastructure services, the business also specialises on ADM for cards, capital markets and corporate banking.

Revenue for CTS is expected to reach around $80m (£54.3m) in 2008. With the acquisition, Wipro hopes to strengthen its relationship with Citi, while the bank claims it will offer the possibility to “improve operating leverage while focusing on core banking competencies.”

The news follow Citi’s recent disposal of its India-based business processing outsourcing arm to outsourcing group Tata Consultancy Services (TCS) for around $505m (£343.3m).

Citi said at the time that its motivation for the sale of that unit was a prospective reduction in operating expenses related to business processing, as well as the opportunity to free up resources to focus on other core areas.