HCL Tech to acquire complete ownership of Geometric

HCL Technologies (HCL) has announced acquisition of complete ownership of Geometric in an equity swap deal. 
As per the deal, HCL will buy all businesses of Geometric except the 58 percent stake in 3DPLM Software Solution, a joint venture between Geometric & Dassault Systems.

The HCL-Geometric share swap ratio has been fixed at 10:43, i.e. 43 Geometric shares will fetch 10 shares of HCL. At the current price, the payout for HCL wil be around USD 200 million, which means an enterprise value of 1 times Geometric sales of USD 180 million for FY15.Calling this deal a "truly synergistic transaction", Manu Parpia, CEO and MD of Geometric said, it will benefit both its customers as well as employees. GH Rao, President - Engineering and R&D Services of HCL highlighted that the deal provides several cross-sell and up-sell opportunities with access to over 60 global clients across USA and Europe. The broad end-to-end capabilities across PLM consulting, mechanical and manufacturing engineering that Geometric brings in, will help HCL take advantage of the rapidly growing manufacturing engineering and PLM services market, he added. Industry analysts expressed varied opinions on the deal. Sudin Apte, CEO & Director of Offshore Insights said its a fairly small deal for HCL as Geometric's revenue is just about 3 percent of HCL's annual revenues. However, the deal does make strategic sense given the focus Geometric has on engineering services, he said. Ravi Menon of Elara Securities feels the swap ratio is unfavourable to HCL. Watch video for more...