HCL Tech in pact to acquire Geometric

hcl-reuters Considering the HCL's share price closed at over Rs 820 on Indian bourses on Friday, the deal is valued at Rs 1,280 crore | Reuters

HCL Technologies, one of India's top global IT services providers, on Friday said it has reached a pact to acquire Geometric Ltd in an all-share transaction, valued at over Rs 1,200 crore based on current stock prices of the acquirer.

The deal, however, excludes the 58 per cent stake Geometric owns in a venture with Dassault.

"In consideration of this acquisition, HCL will issue 10 equity shares of Rs.2 each to Geometric shareholders for every 43 equity shares of Geometric of Rs.2 each held by them," the company said in a late evening statement.

"In total, HCL will issue 15,640,546 equity shares of Rs 2 each."

Considering the HCL's share price closed at over Rs 820 on Indian bourses on Friday, the deal is valued at Rs 1,280 crore (nearly $200 million). The shares of HCL had closed at Rs 820.70, up Rs 6.55 or 0.80 per cent on Friday.

"With broad end-to-end capabilities and rich experience across PLM consulting, mechanical and manufacturing engineering that Geometric brings in, the synergies allow us to take advantage of the rapidly growing manufacturing engineering and PLM services market," said G.H Rao, president with HCL.

"It also provides several cross-sell and up-sell opportunities as the customers will benefit from a unique services portfolio of end-to-end engineering, R&D, digital technologies and internet of things capabilities."

Geometric is one of India's leading consulting, mechanical engineering and manufacturing engineering services providers, while HCL is a global engineering services business, with a revenue of around $1.2 billion.

"The business that HCL is acquiring, in one of the largest acquisitions in the engineering services space, has more than 60 global clients in USA and Europe, majorly in automotive and industrial engineering segments," the company statement said.

"As of December 2015, it employs 2,606 people across 13 global delivery locations in the US, France, Germany, Romania, India and China," the statement said, adding HCL will also inherit several unique capabilities of Geometric and intellectual property.

Manu Parpia, chief executive of Geometric said the deal benefits both its staff and customers. "Our customers will have access to a wide range of engineering services which complement Geometric's offerings. Geometric's employees will have the opportunity for growth."

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Topics : #HCL