The deal involves products that are in large growing market fields such as security, commerce and marketing, which are strategic sectors for HCL Technologies
HCL Technologies, Indian multinational technology company, has announced that it is acquiring select software products of American IT major IBM for $1.8 billion (around Rs 12, 700 crore).
The acquisition, an all-cash deal, is subject to concluding of applicable regulatory reviews, is likely to finish by mid-2019, the company said in a statement.
The deal involves products that are in large growing market fields such as security, commerce and marketing, which are strategic sectors for the company.
The products represent an overall addressable market of over US$ 50 billion. These include Appscan to test web applications for security vulnerabilities, Unica for marketing automation, BigFix for secure device management, Portal for digital experience, Commerce for omni-channel eCommerce, Connections for workstream collaboration and Notes & Domino for email and low-code rapid application development.
For five of these products, HCL Technologies and IBM have an ongoing IP partnership.
C Vijayakumar, President & CEO, HCL Technologies said that the large-scale implementation of these products gives us a huge opportunity to serve and reach thousands of international enterprises across a comprehensive range of markets and industries.
“I am confident that these products will see good growth trajectory backed by our commitment to invest in product innovation coupled with our strong client focus and agile product development. In addition, we see tremendous potential for creating compelling ‘as-a-service’ offerings by combining these products with our Mode-1 and Mode-2 services,” he added.
John Kelly, Senior VP – Cognitive Solutions and Research, IBM, said, “We believe the time is right to divest these select collaboration, marketing and commerce software assets, which are increasingly delivered as stand-alone products. At the same time, we believe these products are a strong strategic fit for HCL, and that HCL is well positioned to drive innovation and growth for their customers,” he added.
This is the largest acquisition by HCL Technologies till date, and one of the biggest by an Indian technology firm. The acquisition also shows ambitions of HCL for software products business, which is considered to be the next growth engine for IT firms.