HCL Technologies Ltd. has announced the acquisition of certain businesses from the Communication Technology Group, a unit of Hewlett Packard Enterprise. The acquisition will provide HCL with access to the top 20 global telecommunications service providers, as well as intellectual property assets, engineering, and research and development talent. The cash consideration for the acquisition is Rs 22.5 crore, and while it is a significant and strategic move for HCLTech, the financial impact is not expected to be major.
Hewlett Packard Enterprise will retain part of the former Communication Technology Group business, specifically focusing on operations support systems. The transaction is expected to be completed within six to nine months. HCLTech will be taking over the business support systems-related services portfolio from Communication Technology Group.
This acquisition will enhance HCLTech’s presence in Japan and Europe, which are its largest revenue-generating regions. It will also complement the company’s managed network services offering in the telecom verticals it currently operates in. While Morgan Stanley estimates that proceeds from the acquisition will contribute around 2% of total revenue, Nomura has refrained from providing revenue contribution estimates as HCLTech has not yet disclosed exact figures.
Overall, this acquisition is a strategic move for HCLTech to expand its presence in the telecommunications sector and gain access to key global service providers. With the addition of new intellectual property assets and engineering talent, HCLTech is poised to strengthen its offerings in managed network services and enhance its market position. The acquisition signals HCLTech’s commitment to growth and innovation in the telecom industry.
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