HCL Tech plummets over 4 per cent on acquisition of IBM products

Dnyanada Kulkarni
/ Categories: Trending, Markets

The shares of HCL Technologies plummeted 4.20 per cent during Friday morning’s trading session as the company announced that it would be acquiring select IBM software products for $1.8 billion. Once the required regulatory reviews are concluded, the transaction will be closed around mid-2019. 

The software products in question, which represent an addressable market of over $50 billion, include Appscan, BigFix, Unica, Commerce, Portal, Notes & Domino, and Connections. HCL and IBM have an ongoing IP partnership for five of these products. 

The products being acquired by HCL are part of a large growing market areas, such as security, marketing and commerce – all of which are strategic segments for the company. The management commentary highlighted the lucrative prospects offered by these products as they strongly believe them to showcase a good growth trajectory on the back of consistent product innovation, strong client focus and product development. 

The large-scale deployment of these products will expand HCL’s reach to thousands of global enterprises spread across a wide range of industries and markets. 

On Friday, the shares of HCL Technologies opened at Rs 1,001, and hit a high and low of Rs 1,001 and Rs. 935, respectively. At 11:36 am, the stock was trading at Rs. 951, down by 6.02 per cent.   

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