February 2008
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HCL Technologies Buys US-Based Firm For $40 Mn

In order to strengthen its existence in insurance, banking and financial services segment, India’s fifth-biggest IT services company, HCL Technologies has acquired US-based Capital Stream, an IT solutions supplier for lending and straight-through processing for banks and finance companies.

HCL has acquired Capital Stream in an all cash deal of about USD 40 million (Rs 160 crore).

Ram Krishnan, corporate vice-president at HCL Technologies, told, “Financial lending has always been our focus and we have been trying to acquire capabilities to provide solutions in the commercial lending processes. This acquisition provides us that capability.”

The recent deal will improve HCL’s capacity to offer end-to-end solutions via product and multi delivery capability to commercial as well as retail financial institutions.

HCL automatically gets around 35 clients of Capital Stream, comprising Bank of America, Bank of Canada, etc. It also aspires to expand this capacity for its customer companies in other geographic areas also.

Ramkrishna, corporate vice-president and head, mergers & acquisitions, IT Services, at HCL said, “The acquisition is part of a well-structured M&A strategy to fulfill HCL’s aspiration to be a global leader in selected industry verticals by using acquisition to bridge gaps or enhance our service offerings.”

Recently, HCL has rolled out a laptop known as ‘MiLeap X’, which is priced at just Rs 13,990. The company said that this is the most inexpensive model in the world. With this laptop model, HCL hopes to augment its share in the Indian laptop market.

In Q3 2008, financial services imparted 28 percent to HCL Technologies’ revenue.

Source: Stock Watch

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