HCLTech To Take Over HPE’s Communication Tech Assets For $225M

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IndianTech Giant HCLTech announces to expand its strategic partnership with Hewlett Packard Enterprise, buying the latter’s certain tech assets for $225M in cash. 

IT service company HCLTech plans to buy HPE for $225 million as it eyes the telecom service market. Through this acquisition, HCLTech will also acquire intellectual property(IP), Engineering and R&D talent, and client relationships with top global communication service providers. It is set to absorb almost 1500 employees and 700 contractors with telecom industry experience in countries like India, China, Japan, Italy, and Spain. 

As a part of the deal HCLTech will gain a portfolio of service offerings that includes industry-leading IP, solutions and systems integration around Business Support Systems (BSS), network application, service cloudification, and data intelligence. These will complement its existing digitised services with artificial intelligence (AI), Internet of Things (IoT), and data-driven models; enhanced efficiency; frictionless integration; and an end-to-end partner ecosystem, as the Noida-based company said in their press release.

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The transaction, which does not include transfer of shares, is expected to close in 6 to 9 months with regulatory approvals and other customary closing conditions. HPE will continue to retain the part of its former CTG business focused on Operations Support Systems (OSS). This part, which sits within HPE Aruba Networking, is a leader in OSS as well as public 5G SDM and private 5G networking. It will continue to implement value for HPE’s telco customers and partners.

This planned strategic partnership will strengthen HCLTech’s telecom practice to address the rapidly transforming global telecom market, hopes C Vijayakumar, CEO and Managing Director of HCLTech. By acquiring top engineering talent and industry-leading IP from the CTG group of HPE, HCLTech hopes to achieve direct relationships with global CSPs that include 20 of the Top 30, which will accelerate their growth strategy globally. The company wants to take this strategic partnership with HPE further, for growth through innovation, joint integrated propositions and transformation services. 

On the other hand, Marie Myers, HPE Executive VP and CFO says, “I am confident we have a winning strategy that positions us to unlock more long-term growth and further differentiate us from the competition. The work we have done to pivot our portfolio to pursue growing opportunities across edge, hybrid cloud, and AI will enable us to continue to deliver innovation for our customers and maximise value for our shareholders.”

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