Geometric surges on transfer of business to HCL Technologies

Geometric has surged 18% to Rs 232, also its fresh record high on the BSE in early morning trade, after HCL Technologies agreed to buy all of the business done by software firm, except a joint venture the latter has with Dassault Systèmes SA, in a share-swap deal valued at $190 million.

Under the transaction, the entire business of Geometric will be transferred to HCL Technologies by way of demerger, except for its 58% share in the joint venture with Dassault Systèmes (3DS) (3DPLM Software Solutions Limited (3DPLM)), Geometric said in a statement.

Read more from our special coverage on "GEOMETRIC, HCL TECHNOLOGIES"

• Geometric trades weak ahead of board meet

 

In return, shareholders of Geometric will receive shares in HCL Tech in a swap ratio of 10 equity shares of HCL Technologies for every 43 equity shares of Geometric, it added.

Geometric, on its part, will merge into 3DPLM Software Solutions Ltd (3DPLM), its joint venture with Dassault Systèmes, thereby giving 100% ownership to the French company. Every shareholder of Geometric will receive one listed redeemable preference share of Rs.68, carrying a dividend of 7% per annum, in 3DPLM.

HCL will issue a total of 15.64 million shares which means HCL has valued the firm’s business at Rs 1,284 crore. The transaction will help HCL, the country’s fourth largest information technology (IT) firm, increase its business in the engineering services space, the brokerage house Angel Broking said in a client note.

At 09:32 AM, Geometric surged 14% at Rs 224, while HCL Technologies was up marginally by 0.4% at Rs 824 on the BSE.