HCLTech, India’s third-largest IT services provider, has announced the acquisition of select assets of Communications Technology Group, a commercial division of Hewlett Packard Company, for $225 million (around Rs 1,870 crore) in cash. This deal will also involve the absorption of approximately 1,500 employees and 700 contractors with expertise in engineering services for the telecom industry in various countries. The acquisition includes industry-leading intellectual property, engineering and R&D talent, and customer relationships with global communication service providers.
The acquired assets provide engineering telecommunication services for communication service providers in Europe, Japan, and North America. It is important to note that HPE will retain the operations support systems portion of its former CTG business. The transaction, which does not involve the purchase of shares, is expected to close within 6 to 9 months, subject to regulatory approvals and other customary closing conditions.
With this acquisition, HCLTech aims to enhance its portfolio of service offerings, including industry-leading IP, solutions, and systems integration in areas such as business support systems, network applications, cloud services, and data intelligence. This move is expected to complement HCLTech’s existing digital services with artificial intelligence, Internet of Things, and data-driven models, improving efficiency and integration across the partner ecosystem.
The Telco Solutions group, part of HPE Aruba Networking, will continue to focus on OSS, orchestration, assurance, public 5G SDM, and 5G private networks for HPE’s telecommunications customers and partners. The acquisition is part of HCLTech’s broader strategy to strengthen its presence in the rapidly expanding global telecommunications market and accelerate growth within the industry. The company’s CEO, C. Vijayakumar, highlighted the importance of the acquisition in enhancing capabilities and relationships with global CSPs.
In FY24 Q4, HCLTech saw revenue growth driven by sectors like telecom, media, publishing, and entertainment, with telecom contributing 11.5% of the revenue share. The company reported a 39.2% year-on-year growth and a 21.6% sequential growth in revenue for Q4FY24. Engineering and R&D accounted for 16.1% of segment revenue share, showing a 6.4% year-on-year growth but a 1.6% decline from the previous quarter.
Overall, the acquisition of assets from Communications Technology Group is expected to bolster HCLTech’s position in the telecommunications industry and drive further growth and expansion in the global market.
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https://economictimes.indiatimes.com/tech/tech-bytes/hcltech-to-buy-hewlett-packards-communications-tech-assets-for-225-million/articleshow/110373625.cms
