HCLTech spends $400 million on acquisitions in a week as it bets on improving AI, data offerings
The acquisitions mark the company's largest spending on such transactions in three years as it shifts focus on software-led capabilities.
HCL Technologies Ltd announced acquisitions for $400 million in the past week, the most spent on such transactions in three years, to strengthen its AI and data offerings for customers increasingly adopting automation.
India’s third-largest IT services company said on Monday that it would spend more than $240 million to buy Jaspersoft, a US data analytics company. That day, HCL also said it would buy Wobby BV, a Belgian startup that provides AI agents for data analysis purposes.
The company’s acquisition spree started on 18 December, when it said it would purchase the Telco Solutions business of Hewlett Packard Enterprise for $160 million. This division provides AI and cloud software to telecom companies.
The acquisitions come as a shot in the arm for C Vijayakumar, the chief executive officer of the fastest-growing of the country’s five largest IT services companies. HCL ended last year with $13.84 billion in revenue, up 4.3% from the preceding year.
The latest acquisitions are intended to improve capabilities and not to scale business units, according to Phil Fersht, CEO of HFS Research, a Massachusetts-based research firm. It signals intent and urgency as HCLTech accelerates its push to strengthen software-led and data-driven capabilities rather than rely solely on traditional services growth, he said.
“The pace matters because it shows management believes the window to reposition for AI-led, platform-centric deals is now, not over the next few years. These are targeted capability buys, not scale acquisitions, aimed at sharpening differentiation in analytics, integration, and enterprise data workflows," Fersht said.
Data analysis
Jaspersoft, a business unit of Cloud Software Group based in Fort Lauderdale, Florida, specialises in data analysis. As part of the acquisition, each of Jaspersoft’s 115 employees is expected to shift to HCLTech’s software product arm called HCLSoftware. HCLTech did not share the incremental revenue from the acquisition, saying it had bought only certain assets and not a company whose revenue could be determined.
HCLTech’s Jaspersoft acquisition will allow its clients to label, search and manage access to data.
“As GenAI adoption accelerates, our customers want business intelligence solutions that can deliver consistent analytics and reports and offer flexibility to fully own the analytics experience," said Marc Potter, CEO and portfolio general manager of Actian, HCLSoftware’s data and AI division.
The Wobby acquisition has a similar motive. Noida-based HCLTech paid about $5.3 million to acquire the startup. Upon completion of the acquisition, HCL is expected to get about $100,000 a year from Wobby.
“Wobby is reinventing how teams do business intelligence by building AI agents that not only answer questions but also are evolving toward proactive analytics by sharing automated insights," said Amra Dorjbayar, CEO and co-founder of Wobby. “Combining Wobby’s capabilities with the Actian Data Intelligence platform will offer customers a differentiated approach to data management."
Both these acquisitions – Jaspersoft and Wobby – are aimed at improving AI and data offerings for HCLSoftware, which makes up a little less than a tenth of its total business. With these acquisitions, the IT services company eyes better AI and data capabilities to service clients increasing automation adoption. The acquisition of HPE’s telco solutions business is expected to accelerate 5G network adoption.
Cash payment
HCLTech’s acquisitions over the past seven days have a cumulative value of more than $400 million, or about ₹3,630 crore. Each acquisition will be paid for in cash and is expected to be completed within six months of signing. HCL ended FY25 with ₹8,245 crore in cash.
In December 2018, HCL spent $1.8 billion to acquire six software products from International Business Machines Corp. This was its highest spending on acquiring select assets and also the largest purchases in terms of value in the sector at the time. Subsequently, CEO Vijayakumar said the company would not spend as much on acquisitions as it had with the IBM purchases.
HCL’s expenditure on acquisitions this year was the highest since spending ₹7,679 crore on acquisitions, both current and deferred payments, in the year ended March 2022, according to a Mint review of company financials. The acquisitions come as its peers turn their gaze towards inorganic growth and capability building.
On 10 December, Tata Consultancy Services, the biggest Indian IT services company, made its largest acquisition since going public in 2004, agreeing to acquire technology consulting firm Coastal Cloud for $700 million in cash. TCS’s latest buyout is its second in less than two months.
The company acquired ListEngage MidCo for $73 million, a US digital marketing services firm, in October this year. TCS is expected to spend about $6.5 billion on data centres over the next six years.
In August, Wipro Ltd, the fourth-largest IT services company, acquired Harman Digital Transformation Services (DTS), the software services and engineering arm of the Connecticut-based audio product manufacturer, for $375 million. The Bengaluru-based company acquired Harman to strengthen its engineering and research and development arm.
This came a little more than a week after Infosys Ltd, the second-largest IT services company, announced its purchase of a 75% stake in Telstra, an Australian IT firm, for $150 million.
topics
