HCLTech to acquire certain assets of HPE's Communication Technology Group for $225 million

IT company HCLTech on Thursday said it will acquire certain assets of Hewlett Packard Enterprise's Communications Technology Group (CTG) for USD 225 million, about Rs 1,874 crore, in an all-cash deal.

As part of this agreement, approximately 1,500 employees and 700 contractors with experience of engineering services for telecom industry in various countries -- including Spain, Italy, India, Japan, China, Americas and APAC region -- will be transferred to HCLTech, the companies said in a note.

HCLTech in a regulatory filing mentioned that the deal is for "purchase of certain assets (CSS) of Communications Technology Group, a business division of Hewlett Packard Enterprise Company. CSS delivers engineering services to leading global Communications Service Providers (CSPs) leveraging its intellectual properties in a global delivery model" for which "total purchase price is USD 225 million".

The deal will strengthen HCL Technologies' presence in telecom vertical by expanding its engineering services and leveraging CSS' IP, solutions and talent at leading CSPs in Europe, Japan, Americas and APAC region, including 20 of the top-30 CSPs globally.

"With this transaction and our planned strategic partnership with HPE, we are strengthening our telecom practice to address the rapidly expanding and transforming global telecom market. With the incoming top engineering talent and industry-leading IP from the CTG group of HPE, we are adding significant capabilities and direct relationships with global CSPs," HCLTech CEO and managing director C Vijayakumar said.

This transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in six to nine months.

"In joining HCLTech, our Communications Technology Group will become part of a strong partner that understands and appreciates the significant heritage of our CTG business, its strategy and its potential for the future," HPE President and Chief Executive Officer Antonio Neri said.