Volvo deal to add 40 new clients, 2500 employees: HCL Tech

Leading IT services provider HCL Tech on Tuesday said it has signed a five-year deal with automobile giant Volvo for its external IT business.The new deal will add close to 40 new clients, 3,500 applications, 20 data centers and include 2500 employees in about 11 countries, says Pankaj Tagra, Head of Nordics Business at HCL Tech. Speaking to CNBC-TV18, Tagra says that the deal is the biggest in the sector in last two years in the global space. The deal is for five years and will be extended post that, he adds. "The external business is just a fraction of the total internal business, which we would be signing up with Volvo," he says. The external business deal is an all cash deal, he says adding that for internal business, Volvo will pay the company for the services provided. Below is the transcript of Pankaj Tagra’s interview with Reema Tendulkar on CNBC-TV18.Q: First give us some numbers. How much have you paid for acquiring the Volvo’s internal business because we know the valuations for external. USD 138 million is what you paid. Walk us through the numbers for the internal business.A: In terms of numbers, I can tell you a little bit of the contours of the deal. We are not allowed to disclose the numbers, but in terms of the deal, we would be managing close to 500 applications for Volvo group, involving 20 data centres and 20,000 basis points of mainframe capacity and acquiring people in 11 countries. So, all this can conjure up to be one of the large deals. In fact, we should not call it as a large deal, this is one of the big mega deals which any Indian service provider would have signed it till date. Q: Just to get a sense of the size. For instance external ID business was acquired for USD 138 million. It had revenues of USD 190 million as of the last year. Would the internal business be more or less than that of the external business if you could at least tell us directionally?A: Absolutely. The external business is just a fraction of the total internal business which we would be signing up with Volvo. So, probably that can give you a direction that if USD 190 million odd revenue is the revenue for an external business and if this is a fraction of what total we have signed with internal, you can imagine the size of the deal.