IT major HCL Technologies on Friday announced its intent to acquire Cisco's Self-Optimising Network (SON) technology for about $50 million ( around Rs 377.93 crore).
The target entity is an asset carve-out of the product and services business that comprises the Self-Optimising Network (SON) from Cisco Systems Inc, HCL said in a regulatory filing.
SON is a multi-vendor multi-technology (MVMT) solution that optimises the Radio Access Networks (RAN) for 2G-5G communication.
It helps customers boost performance, harmonise the multiple technologies that comprise a RAN, and maximise the capabilities of existing infrastructures, resulting in reduced capital and operational expenditures.
As part of the deal, some employees who work on Cisco's SON technology will move from Cisco to HCL, a statement said. HCL, however, did not disclose details about the number of employees.
The deal - which is expected to be completed by January 2021 - is worth "$49,999,000".
"This acquisition, which comprises of products and services built on Cisco's SON technology, will help HCL meet the growing needs of its customers in the telecommunications industry, which includes tier-one communications service providers globally by adding the power of Cisco's SON's MVMT and application support to its clients," HCL said in its statement.
The said business unit is based in San Jose, California in the US and has offices in Israel and India.
"HCL's decision to make this acquisition comes in line with our Mode 3 (products and platform) strategy. As we expand our footprint in this space and support the mobility needs of our customers; the SON products and services will now be included in our telecommunications offerings," HCL Technologies Corporate Vice President Sukamal Banerjee said.
This will gain further importance with 5G networks, he added.
Both parties will file for approval from CFIUS (Committee on Foreign Investment in the US) and FEMA (Foreign Exchange Management Act, 1999) as well as the Brazilian Administrative Council for Economic Defense.
Last year, HCL Technologies had completed its $1.8-billion acquisition of select IBM products entailing seven products in areas including security, marketing and collaboration solutions, and representing a total addressable market of more than $50 billion.
Cisco, in a separate statement, said supporting its customers' and employees' success is a top priority for the company.
"We continually look to optimise our business and have decided to divest of our self-organising network (SON) business to our trusted IT partner HCL Technologies Ltd. Divestiture of the SON business will allow Cisco to focus our resources on 5G core and IP infrastructure," it added.
Cisco said it continues to develop solutions for its software-defined mobile network architecture as well as invest in 5G innovations aimed at helping its service provider customers maximise their 5G investments.
"Our SON customers will be well-served by HCL's proven expertise in implementing high-touch, flexible solutions required to scale engineering services for customers' SON needs," it added.
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