HCL Technologies to acquire Australia-based firm DWS for $116 million
HCL Technologies has announced its intent to acquire Melbourne-headquartered DWS Ltd. in a step towards enhancing its digital initiatives in the Australia and New Zealand region.
The Noida-based firm will acquire DWS, a company that provides a wide range of IT services including digital transformation, and application development and support, for a total equity value pay-out consideration of 158.2 million Australian Dollars (approx $116 million). The transaction is expected to close in December 2020, subject to closing conditions, including regulatory approvals.
“We are excited for this expansion of HCL Technologies in Australia and New Zealand and are confident that our combined strengths will further accelerate the digital transformation journeys of our clients and innovations for their end customers,” said Michael Horton, executive vice president and country manager (Australia & New Zealand), HCL Technologies. “HCL has invested in the region for over 20 years and is committed to enabling digitalisation and growing the local ecosystem.” HCL Tech said it currently employs 1,600 people in major Australian cities, including Canberra, Sydney, Melbourne and Perth.
This comes as India’s third-largest IT services provider pegged a revenue growth of over 3.5 per cent on a sequential basis on the back of broad-based momentum across service lines, verticals and geographies last week. The company said deal booking has been strong in the ongoing quarter, led by life sciences and healthcare, telecom and media, and the financial services segments. It has also bumped up its operating margin guidance to 20.5-21 per cent for the quarter.
The update was a surprise for the Street as just a couple of months ago HCL Tech, which had posted a revenue decline of over 7 per cent in the June quarter, had guided for a 1.5-2.5 per cent growth in revenues for the remaining quarters of FY21. Margin guidance was in the 19.5-20.5 per cent range.
In the quarter ended Q1FY21, the company reported a profit before tax (PBT) of Rs 3,862 crore, up 31.7 per cent year on year (YoY), while it remained flat on a sequential basis. The net profit for the quarter rose 31.7 per cent YoY to Rs 2,925 crore on account of lower outsourcing costs and other expenses. It, however, fell 7.3 per cent on a sequential basis. Its revenue also fell 4 per cent sequentially to Rs 17,481 crore.
Also, Roshni Nadar Malhotra took the helm of the company as its chairperson in July. She replaced her father Shiv Nadar, who would continue as managing director and hold the designation of Chief Strategy Officer.