INDIA BUSINESS WORLD - FEBRUARY 16^th - FEBRUARY 29^th - 2008

HCL TECH BUYS US CO FOR $40 M

HCL Technologies has announced the acquisition of US-based software product company, Capital Stream, for $40 million. India’s fifth-largest IT company by revenues, HCL, will take over 100 employees of Capital Stream on its rolls as part of the all-cash deal. Capital Stream is expected to generate about $ 25-27-million in revenues for financial year ending March, 31, 2008. lt will start contributing to HCL’s top line from April-June 2008 quarter. The company has a flagship product called Finance Center which is used by top banks such as Bank of America and Rabo Bank.

The acquisition of Capital Stream would enhance HCL’s ability to provide end-to end solutions through product and multiservice delivery capability to commercial and retail financial institutions, the company said.

According to Ramkrishna, corporate vice-president, head mergers & acquisitions, IT services at HCL: “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.” According to IT analysts, retail lending in the US will see a slowdown this year as banks and FIs are averse to doling out loans without strict risk assessment measures. It has also put pressure on IT companies developing products for lending companies. A slowdown in US may also make IT budgets of CIOs flat this year. However, HCL says that it continues to see no cut in non-discretionary spend of IT budgets of its clients.