HCL Technologies rose 1.22% at Rs 830.70 at 11:00 IST on BSE after the company announced that it has signed definitive agreement to acquire the business of Geometric.
The separate announcements were made by HCL Tech and Geometric on Saturday, 2 April 2016.Meanwhile, the BSE Sensex was up 75.42 points, or 0.3%, to 25,345.06.
Shares of Geometric jumped 17.7% to Rs 230.70.
On BSE, so far 69.546 shares were traded in the counter of HCL Tech, compared with an average volume of 1.03 lakh shares in the past one quarter. The stock hit a high of Rs 834.60 and a low of Rs 815.50 so far during the day. The stock hit a 52-week high of Rs 1,047.50 on 29 May 2015. The stock hit a 52-week low of Rs 785.85 on 12 February 2016. The stock had underperformed the market over the past one month till 1 April 2016, falling 1.36% compared with Sensex's 6.27% rise. The scrip had, however, outperformed the market in past one quarter, dropping 2.93% as against Sensex's 3.41% fall.
The large-cap IT services provider has an equity capital of Rs 282.08 crore. Face value per share is Rs 2.
HCL Technologies announced an agreement for the acquisition by way of demerger of the entire business of Geometric, except for the 58% stake that Geometric owns in the joint venture-3DPLM Software Solutions, with Dassault Systemes. In consideration of this acquisition, HCL will issue 10 equity shares of Rs 2 each to Geometric shareholders for every 43 equity shares of Geometric of Rs 2 each held by them. In total, HCL will issue 1.56 crore equity shares of Rs 2 each. The transaction is expected to be accretive on cash earnings per share, HCL said.
The acquisition will be undertaken by way of scheme of artrangement and amalgamation entered into between the HCL Tech, Geometric and 3DPLM Software Solutions and their respective shareholders and creditors. Under the Scheme and as part of the composite transaction, it is proposed that Geometric will transfer its entire IT enabled engineering services, PLM services and engineering design productivity software tools business to HCL Tech by way of a demerger and immediately following the demerger, Geometric comprising its shareholding in 3DPLM Software Solutions will be merged into 3DPLM Software Solutions. Geometric is one of India's leading PLM consulting, mechanical engineering and manufacturing engineering services providers. The business being demerged to HCL Tech has more than 60 customers with long term and stable relationships and counts key original equipment manufacturers (OEMs) in USA and Europe in automotive, industrial and heavy engineering domain among its customers.
The transaction is expected to be closed in Q2 December 2016. The acquisition strengthens HCL's presence significantly in the PLM consulting as well as mechanical and manufacturing engineering space. It also significantly strengthens HCL's automotive and industrial practices. The acquisition would take place through a scheme of arrangement which would be subject to the approval of the High Courts at Mumbai and Delhi in addition to the approval of the regulatory authorities, HCL Tech said.
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HCL Technologies' consolidated net profit rose 11.2% to Rs 1920 crore on 2.4% growth in revenue to Rs 10341 crore in Q2 December 2015 over Q1 September 2015.
HCL Technologies is a leading global IT services company working with clients in the areas that impact and redefine the core of their businesses.
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