HCL Technologies is acquiring German IT service provider and SAP partner H&D International Group. Financial terms were not revealed, but multiple reports suggest HCL paid US $34.7 million for the business.
H&D employs 1,400 people and claims to be one of the largest IT service providers in the German automotive industry. The company also operates in more than 20 locations worldwide, and focuses mainly on IT Infrastructure and application services.
Meanwhile, HCL is one of India's largest IT outsourcing and software development specialists. The company, back by more than 120,000 employees, had consolidated revenues of US$7.8 billion, for the 12 months ended March 31, 2018.
Executives Weigh In
In a prepared statement, HCL Corporate VP Ashish Gupta said:
“Germany is a critical market for HCL as we continue to expand our business in Europe. We feel the German market is at an inflection point and it is the right time for HCL to expand and make significant investments here. H&D has a long-standing track record of high-quality service delivery and we are confident this will play a significant role in our continued growth in Germany.”
Added Bernhard Hönigsberg, CEO of the H&D International Group:
“By combining H&D’s delivery capabilities with those of HCL, we have an unprecedented opportunity to add tremendous value to the services we provide to support our clients’ IT transformation ambitions. Furthermore, the experience and know-how of HCL and H&D complement each other perfectly and our employees are set to benefit significantly from the new opportunities that lie ahead."
The deal is expected to be finalized in August, marking HCL's third acquisition of 2018.
SAP Partner Mergers, Acquisitions
SAP partners have generated plenty of merger and acquisition (M&A) activity over the past year. Recent deals include:
- Dimension Data earlier this week acquired a majority stake in London-based SAP partner e2y.
- Private equity firm Symphony Technology Group (STG) acquired SAP data automation partner Winshuttle Holdings in May 2018.
- Milan-based Techedge S.P.A. acquired NIMBL, a 100-person SAP partner focused on midmarket and enterprise managed services in March 2018.
- One Equity Partners, a middle market private equity firm, acquired Rizing LLC, an SAP-focused provider of IT systems integration and implementation services in February of this year.
- NTT Communications Corp. in November 2017 acquired Secure-24 Intermediate Holdings, a U.S.-based managed services provider (MSP) focused on hosted SAP, Oracle and Microsoft solutions.
- Capgemini in September 2017 acquired Lyons Consulting Group, a 300-person Salesforce Commerce Cloud, SAP Hybris and Magento partner.
- Lightwell, an IT services and solutions provider in Dublin, Ohio, in September 2017 acquired BAAX LLC—a Columbus, Ohio-based consulting firm that specializes in SAP and Oracle data analytics.
Another German IT Services M&A Deal
Meanwhile, CSPi is selling its Germany operations (known as CSPi GmbH, Technology Solutions) to European IT service provider and media conglomerate Reply for €10.0 million in cash, which is approximately US$11.6 million. The transaction is expected to be finalized in Q4 2018.
The deal allows CSPi to focus on higher-margin managed services in the U.S., while driving continued investments in the company's new ARIA cybersecurity products.
