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HCL Technologies to acquire Australian IT firm DWS
Photo Credit: VCCircle

Noida-based software services major HCL Technologies Ltd will acquire Australian information technology and business consulting company DWS Ltd for A$162.15 million ($118.6 million or Rs 870 crore) in cash.

The acquisition will help HCL enhance its contribution to digital initiatives in the Australian and New Zealand markets as well as strengthen its own portfolio across key industries, it said in a statement Monday.

HCL will pay A$1.23 per share, including a dividend of A$0.03 per share, to shareholders of Melbourne-based DWS. This is a premium of 36.7% to the closing price of DWS on September 18 on the Australian Securities Exchange.

Shares of HCL jumped 4% to Rs 844 apiece around noon on Monday in a flat Mumbai market.

DWS provides services such as digital transformation, application development and support, project management and consulting. The company had 772 employees as of June-end, mostly in Australia. It posted revenue of A$167.9 million ($122.8 million) for the year through June 2020, up from A$163.5 million the year before.

“HCL has invested in the region for over 20 years and is committed to enabling digitalisation and growing the local ecosystem,” said Michael Horton, HCL’s executive vice president and country manager for Australia and New Zealand.

HCL expects the transaction to close by December. The company reported consolidated net sales of Rs 70,676 crore for the financial year ended March 2020 and a profit after tax of Rs 11,057 crore.

News of the DWS acquisition comes two months after HCL said that Roshni Nadar Malhotra, the daughter of founder Shiv Nadar, had been appointed as its chairperson with immediate effect.

Shiv Nadar will continue to be the managing director of the company and will also hold the title of chief strategy officer.

HCL has been one of the most prolific acquirers among India’s software services companies. It has struck almost a dozen deals in India and overseas since 2015, according to VCCEdge, the data research arm of Mosaic Digital.

In May, the company said it would acquire products and services built on Cisco Systems Inc.’s self-optimizing network technology for almost $50 million in cash.

Its other acquisitions include advanced technology design services provider Sankalp Semiconductor Pvt. Ltd in September last year, the US-based Strong-Bridge Envision in March, and some software businesses from IBM Corp for $1.8 billion in December 2018.

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