HCL Technologies Ltd said on Friday it has agreed to acquire US-based engineering and design services provider Butler America Aerospace LLC, a wholly owned subsidiary of Butler America Inc., for $85 million (Rs 567 crore) in cash.
The acquisition will bolster HCL’s capabilities in engineering services and access to clients with large R&D spends, the Indian software services exporter said in a stock-exchange filing.
HCL Tech, founded by billionaire Shiv Nadar, joins bigger rivals Wipro Ltd and Infosys Ltd in snapping up overseas assets as Indian software services exporters seek to diversify their offerings beyond their traditional outsourcing business.
Butler Aerosapce was recently spun off from Butler America. It serves customers primarily in the aerospace and defence industries in the US. It has about 900 engineers and seven design centres.
The company had revenue of $46.3 million in January-June 2016. Its full-year revenue was $85.4 million in 2015, up from $78.3 million the year before. The company's earnings margin before interest and tax was 10.9% in 2014, 12.2% in 2015 and 12.4% in January-June 2016.
The acquisition is subject to certain regulatory approvals and is likely to be closed by 31 December 2016, HCL said.
HCL's announcement same a day after Bengaluru-based Wipro said it had agreed to acquire US-based cloud services company Appirio Inc. for $500 million . Including Appirio, India's third-largest IT services firm has struck five acquisitions since July last year spending about $1.3 billion in total.
Infosys, the No. 2 software services exporter, made three major acquisitions in 2015. It agreed to buy Panaya Inc for $200 million in February last year, and sealed a $120 million deal to buy m-commerce enabler Kallidus in April. In October, Infosys agreed to pay $70 million for US-based Noah Consulting.
HCL itself has bought a number of companies. In April, it agreed to acquire the IT business of Mumbai-based engineering services provider Geometric in an all-stock deal valued around Rs 1,300 crore. HCL has a strong focus on the engineering services business, which clocked revenue of around $1.2 billion in 2015.
In January, HCL said it would buy UK-based Point to Point Ltd and Point to Point Products Ltd for around $11 million.
The company purchased customer relationship management services provider PowerObjects for $46 million in October last year. The same month, it inked a deal to take over Swedish automaker Volvo’s external IT business for about $138 million.
HCL's biggest acquisition was the 2008 deal where it pipped Infosys to buy UK-based Axon Group Plc for about $780 million.
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