HCL eyes $2-bn US acquisitions

HCL Technologies, the country's fifth largest IT company, is eyeing acquisition worth $1-2 billion (around Rs 4,600-9,200 crore) in the US and planning to close the deals by 2011.

The company also has identified eight focus areas such as engineering services, enterprise application, infrastructure management and enterprise transformation services.

HCL Technologies' acquisition strategy is three fold; smaller tuck-in buyouts are targeted towards purchasing firms that bring intellectual property (IP) to the company. The company sees these buyouts are in the range of $100 million and less. Some of the recent acquisitions like Capital Stream, Liberata Financial Services and Control Point Solutions fall in this category.

The IT giant is also scouting for Japan and Germany as part of its second level of inorganic growth strategy to expand its geographic reach. Apart from these, HCL's plan includes big buyouts that it calls 'transformation acquisitions'.

"Next two years will be crucial for HCL Technologies because of our proactive research and search for transformation acquisitions. We are active in all three zones of acquisitions and we have a good balance sheet to fund our plans," said Vineet Nayar, CEO, HCL Technologies. The company has cash reserves of $580 million.

When asked about the impact of the recent US financial market turmoil on the company, Nayar said: “HCL is not at risk. Rather the momentum of signing RFPs has gone up as compared to a few months back.” However, he emphasised that the falling discretionary spend and increasing number of deals must coincide so that outsourcing component increases.

There have been reports that the Delhi-based firm with revenues of Rs 7,800 crore may counter Infosys Technologies acquisition bid of UK-based Axon Group. Last month, Infosys had declared its intention of acquiring Axon for Rs 3,300 crore. It had made an offer of 600 pence per share.