HCLTech announced on Thursday that it will be acquiring specific assets of Hewlett Packard Enterprise’s Communications Technology Group (CTG) for $225 million in an all-cash deal. This agreement will involve the transfer of around 1,500 employees and 700 contractors from various countries, including Spain, Italy, India, Japan, China, America, and the APAC region, to HCLTech.
The regulatory filing by HCLTech stated that this acquisition is for the purchase of certain assets (CSS) of the Communications Technology Group, a business division of Hewlett Packard Enterprise Company. CSS offers engineering services to leading communications service providers (CSPs) worldwide, utilizing its intellectual properties in a global delivery model. The total purchase price for this deal is $225 million.
By acquiring these assets, HCL Technologies aims to strengthen its position in the telecom sector by expanding its engineering services and leveraging CSS’ intellectual property, solutions, and talent to collaborate with leading CSPs in Europe, Japan, the Americas, and the APAC region. This move is expected to provide HCLTech with enhanced capabilities and direct relationships with global CSPs, including 20 of the top 30 worldwide.
C Vijayakumar, the CEO and Managing Director of HCLTech, expressed his excitement about the transaction, stating that it will enhance the company’s telecommunications practice to cater to the evolving global telecommunications market. He emphasized that the addition of top engineering talent and industry-leading intellectual property from the CTG Group of HPE will significantly boost HCLTech’s capabilities and relationships with global CSPs.
This acquisition is subject to regulatory approvals and other customary closing conditions, with an expected completion timeline of six to nine months. Antonio Neri, the President and CEO of HPE, highlighted the strategic aspect of the deal, stating that by becoming a part of HCLTech, the Communications Technology Group will align with a partner that values its heritage, strategy, and future potential.
In conclusion, HCLTech’s acquisition of assets from Hewlett Packard Enterprise’s Communications Technology Group for $225 million signifies a strategic move to strengthen its presence in the telecom sector. With the transfer of employees and contractors, along with the utilization of CSS’ intellectual property, solutions, and talent, HCLTech aims to enhance its engineering services and relationships with global CSPs. This acquisition is expected to bring significant capabilities and opportunities for both companies, pending regulatory approvals and closing conditions.
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