HCL to acquire Deutsche Software

By siliconindia staff writer   |   Tuesday, 27 July 2004, 07:00 Hrs
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NEW DELHI: HCL Technologies has sought government approval to issue up to 10% equity to Deutsche Bank, in lieu of acquiring the remaining 49% stake in BPO and software joint venture DSL Software through a share swap, reports an Indian daily.

HCL Technologies bought 51% stake in Deutsche Software in ’01 for $25m. The company was then renamed DSL Software. Under the deal, HCL had acquired a 51% stake in the software company’s Singapore-based holding company, BB Asia Pacific Training Centre.

The acquisition, according to an Economic Times report, was made by HCL Tech’s wholly-owned subsidiary in Bermuda. The valuation and issue of HCL stock will be as per Sebi norms.

The stock closed at Rs 306 on Friday.

With this acquisition, HCL will take 100% ownership of DSL and further strengthen its global presence in the financial services segment, one of the largest end-user markets for IT services globally.

As per the terms of the ’01 deal, DSL Software has the first right of refusal on business that is to be sourced by Deutsche Bank from India. This clause is valid for seven years only. This right ensures a sizeable, predictable and visible source of business to DSL Software for another four years. This, however, does not restrict the company from expanding its client base by offering its services to other leading financial institutions.

DSL has grown from 450 employees to about 1,500. DSL Software is setting up a centre in Chennai, which will function as a disaster recovery unit. It will also take care of the company’s non-Deutsche Bank businesses. DSL caters to other major banks in the European region under the aegis of HCL Tech global sales force. At present, DSL’s entire business comes from Deutsche Bank.

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