HCL Tech Makes Counter Bid for Axon Group for �441.1 Million

HCL Technologies (News - Alert), Indian software services company, has launched a counter bid for Axon Group, the UK-based SAP consulting company. The bid values the British company at around £441.1 million. Infosys (News - Alert), another software service company from India, had submitted its bid in August 2008 at £407 million.

 

The counter bid by HCL Technologies is higher by approximately £34 million. Both Infosys and HCL Technologies are rivals in Indian and overseas markets.

 

Meanwhile, a statement from Infosys said: “the company notes the announcement made earlier today by HCL Technologies. Infosys is considering its position and urges Axon shareholders to take no action at this time. A further announcement will be made in due course.”

 

Under the terms of the offer from HCL Technologies, Axon shareholders will receive 650 pence in cash for each Axon share valuing the entire issued and to be issued share capital of Axon at approximately £441.1 million.

 

Axon, which reported profit before taxation of £29.5 million on revenues of £204.5 million for the year ended 31 December 2007, has a diversified customer base across the United Kingdom, North America, and Asia, and it is complementary to HCL’s own customer base. 

 

The proposed acquisition is part of the HCL Technologies growth strategy in global markets. HCL Technologies has identified eight focus areas for growth including enterprise application services. For inorganic growth in these areas, HCL Technologies follows a diligent selection process of proactively identifying acquisition opportunities, and evaluating them against its long-term strategic growth objectives to create shareholder value.

 

“HCL’s transformation journey enters an exciting phase where we are creating partnerships with high performance teams to become significant in our chosen areas of growth. We see Axon as one such transformational opportunity for HCL to become a significant player in the SAP (News - Alert) services space,” said Vineet Nayar, CEO and member of the board, HCL Technologies, in a statement.

 

“I am excited about the high performance and employee centric cultural synergy between HCL and Axon that would help accelerate the process of integration between the two teams,” Nayar added.

 

“The merger of Axon’s strong implementation capabilities with HCL’s strong application and infrastructure management capabilities will help us deliver unique value on an end-to-end basis for the customers of HCL and Axon. The positive interactions between the HCL and Axon management teams since July 08, reinforces my belief that we will come together and create significant incremental value for both our customers and employees,” said Ram Krishna, corporate vice president of Enterprise Application Services.