HCL's equity swap deal to acquire Geometric

IT company HCL Technologies on Friday said it has signed an agreement to acquire all the business of Geometric Limited in an equity swap deal.
The acquisition, however, excludes the 58 per cent stake that Geometric owns in a joint venture -- 3DPLM Software Solutions Ltd -- with Dassault Systemes.

HCL will issue 10 equity shares of Rs 2 each to Geometric shareholders for every 43 equity shares of Geometric of Rs 2 each held by them, the company said in a statement.

In total, HCL will issue 15,640,546 equity shares of Rs 2 each.

Mumbai-based Geometric is a product life cycle management consulting, mechanical engineering and manufacturing engineering services providers.
Shares of Geometric settled at Rs 196, while HCL ended at Rs 820.70 apiece on BSE today.

"With broad end-to-end capabilities and rich experience across PLM consulting, mechanical and manufacturing engineering that Geometric brings in, the synergies allow us to take advantage of the rapidly growing manufacturing engineering and PLM services market," HCL Technologies President for Engineering and R&D Services GH Rao said.

The acquisition strengthens HCL's presence significantly in the PLM consulting as well as mechanical and manufacturing engineering space. It also significantly strengthens HCL's automotive and industrial practices.

The business, that HCL is acquiring, is one of the largest acquisitions in the engineering services space, the statement said, adding that Geometric has more than 60 global clients in the US and Europe, majorly in automotive and industrial engineering segments.

As of December 2015, Geometric employed 2,606 people across 13 global delivery locations in the US, France, Germany, Romania, India and China.
Geometric was incorporated in 1994 and is listed on the BSE and the National Stock Exchange.

For the fiscal years ended March 2014 & March 2015, the revenues of Geometric were Rs 787.12 crore and Rs 813.93 crore respectively.
JM Financial advised Geometric on the deal.

HCL will inherit several Geometric processes, methodologies and intellectual properties in PLM and digital manufacturing, along with highly specialised professionals in the PLM consulting as well as mechanical and manufacturing engineering space.

"The transaction thus creates a unique portfolio of end-to-end engineering and R&D capabilities across the full product lifecycle - hardware, software, mechanical and manufacturing engineering and PLM consulting," the statement said.

"Our customers will have access to a wide range of engineering services which complement Geometric's offerings.

Geometric's employees will have the opportunity for growth as they can serve HCL Tech's large customer base," Geometric CEO and MD Manu Parpia said.

Geometric in a separate statement said that Dassault Systemes will acquire 100 per cent stake of JV 3DPLM.

"In exchange for the ownership in Geometric Ltd shareholders of Geometric Ltd shall receive one listed redeemable preference share of Rs 68 each carrying dividend of 7 per cent per annum in 3DPLM against every one share of Geometric Ltd," the statement said.

In a separate statement, Dassault Syst mes Senior Executive Vice President, Research & Development Dominique Florack said, "The full integration of 3DPLM into Dassault Syst mes is the result of continuous investment and very successful partnership and also marks the strategic next phase in the contribution of 3DPLM in our strategic R and D operations."

Source:Techgig