HCL Technologies has acquired Australian-headquartered IT service provider DWS for A$162 million in cash as the Indian tech giant looks to stake a bigger claim on Australia and New Zealand.
The all-cash deal will see HCL pay A$1.23 per share for DWS, plus debt, notably higher than the 21 September trading price of .90C.
Following the acquisition, DWS will become a wholly-owned subsidiary of HCL, although no details were provided regarding the role of CEO Danny Wallis and the provider’s 745 consultants,
Wallis, who owns 42 per cent of the publicly listed company’s shares, encouraged remaining shareholders to vote in favour of the deal.
“The opportunity to realise certain value at a significant premium represents a great outcome for our shareholders, who have been supportive over the company’s long history of its strategy and direction,” he said.
Founded in 1991, DWS has offices in Melbourne, Sydney, Adelaide, Brisbane and Canberra, and provides services in IT consulting, digital transformation, cloud, business analytics and robotic process automation among others. It also established a subsidiary in New Zealand in late 2019.
However, its revenue from continuing operations was nearly A$168 million, up by almost A$4.5 million, year-on-year, or about 3 per cent.
Underlying pre-tax earnings (EBITDA) was A$28.5 million, an increase of A$2 million, or about 8 per cent compared to the previous year.
Meanwhile, HCL recently deepened its relationship with Broadcom, which will see broaden its professional services offerings to include Symantec Enterprise Division (SED) consulting services.
It also expanded its existing cloud partnership with Google Cloud, a DWS partner, launching a new dedicated Google Cloud Business Unit.
“We are excited for this expansion of HCL Technologies in Australia and New Zealand and are confident that our combined strengths will further accelerate the digital transformation journeys of our clients and innovations for their customers," HCL A/NZ country manager Michael Horton said.
“DWS has forged a sterling reputation, powered by highly talented consultants who enable organisations to be at the cutting edge of technology. We look forward to welcoming the DWS team to HCL and creating enhanced global learning and career opportunities for them.”