HCLTech acquires German autonomous driving tech firm for $279 million

HCL Technologies' Q1 numbers missed the Street's expectations on all three fronts of profit, revenue and profitability.

India’s third largest IT services firm, HCLTech has acquired a 100 percent equity stake in German automotive engineering services provider ASAP Group. The acquisition will help the IT Company to strengthen its portfolio in areas such as autonomous driving, e-mobility and connectivity; and expand into key automotive markets in Europe, the Americas and Japan.

According to filings on BSE, the transaction is going to be entirely in cash, valuing the company at around € 251.1 million ($279.72 million). The deal, which will be done through HCLTech’s UK subsidiary, is subject to relevant regulatory approvals and is expected to close in September 2023.

Founded in 2010 and headquartered in Ingolstadt, Germany, ASAP is focused on future-oriented automotive technologies. The company works with the top automotive original equipment manufacturers (OEM) and tier-1 suppliers in Germany. ASAP's services portfolio comprises electrics/electronics, software, consulting, service testing and validation and vehicle development.

The company has over 1,600 employees across nine locations in Germany.

Hari Sadarahalli, Corporate Vice President, Engineering and R&D Services, HCL Tech said, "Core engineering is at the heart of HCLTech's DNA and truly differentiates our services portfolio. ASAP has developed some exciting capabilities in automotive engineering, and we share their vision for future of mobility. This agreement will enable us to scale these capabilities and innovations across our global network."

"This Investment also reinforces our commitment to Germany, which is a focus market for us. We will continue to nurture local talent and innovation ecosystem to unlock their potential," he added.

Michael Neisen, CEO of the ASAP Group added, "We are delighted to align our growth journey with HCLTech's purpose of bringing together the best of technology and people to supercharge progress for all stakeholders. We are confident that the combination of HCLTech and ASAP's engineering and technology performance will bring best-in-class advantages to the automotive industry worldwide."

On July 12, HCLTech reported its earnings for the first quarter of fiscal 2024. The company’s net profit grew 7.6 percent year-on-year (YoY) while sequentially it fell by 11.2 percent. The company also reported a slower order book of $1.56 billion for the quarter as compared to its usual range of $2 billion and above.