HCL Technologies falls on profit booking after Actian Corporation deal

In past two trading days, HCL Technologies had outperformed the market by surging 7% against 0.65% rise in the S&P BSE Sensex.

HCL  Technologies was down 2% to Rs 990, falling 3% from its early morning high after the company and Sumeru Equity Partners (SEP) signed a definitive agreement to acquire US company Actian Corporation in an all-cash deal, valued at $330 million (Rs 21.55 billion).

HCL will own 80% stake in the joint venture that has been formed, with SEP holding 19.5% and Rohit De Souza (Actian Corporation CEO) owning 0.5%, HCL said in a regulatory filing on Thursday after market hours.

The acquisition will be funded by HCL Technologies, making an equity contribution of US $ 164 million and debt of US $ 125 million. SEP and De Souza will contribute US $ 40 million and US $1 million, respectively, the filing said.

HCL Technologies said the acquisition is part of the Company’s Mode 3 strategy to augment its capabilities in the data management products and platforms. HCL would own high margin, recurring revenue IP business in data analytics, integration and management products.

At 10:40 am; HCL Technologies was trading 1.4% lower at Rs 997, after hitting intra-day high of Rs 1,020 on the BSE. A combined 1.06 million shares changed hands on the counter on the NSE and BSE so far. On comparison, the S&P BSE Sensex was up 0.49% at 34,267 points.

In past two trading days, HCL Technologies had outperformed the market by surging 7% against 0.65% rise in the benchmark index. It trading close to its 52-week high of Rs 1,042 recorded on January 24, 2018 and all-time high of Rs 1,058 touched on March 11, 2015 on the BSE in intra-day trade.