ASX-listed Australian IT outsourcing and services firm DWS has been acquired by multinational systems integrator HCL Technologies for a total consideration of $225 million.
The acquisition will see HCL adding some 700 staff across DWS’s offices in Melbourne, Sydney, Adelaide, Brisbane and Canberra, on top of its current 1600-strong staff.
DWS said it would leverage HCL’s “significant global resources and expertise” to offer an expanded platform to its Aussie clients, while HCL also gets to bolster its services offering to existing clients and become a one-stop-shop.
The consideration is composed of $162.15 million in cash (or $1.23 per DWS share) and $62.5 million in DWS’ debt, sources close to the matter told CRN.
In the ASX announcement, DWS’ board unanimously recommends that its shareholders vote in favour of the HCL acquisition, unless a superior proposal comes along.
HCL Technologies executive vice president and country manager Michael Horton said, “We are excited for this expansion of HCL Technologies in Australia and New Zealand and are confident that our combined strengths will further accelerate the digital transformation journeys of our clients and innovations for their end customers.”
“HCL has invested in the region for over 20 years and is committed to enabling digitalisation and growing the local ecosystem. DWS has forged a sterling reputation, powered by highly talented consultants who enable organizations to be at the cutting edge of technology. We look forward to welcoming the DWS team to HCL and creating enhanced global learning and career opportunities for them.”
Addressing DWS shareholders, DWS managing director Danny Wallis said the acquisition “represents an outstanding outcome" for all DWS stakeholders, citing the proposal’s premium over the current share price of 90 cents.
“We are delighted the DWS team is joining HCL. As a leading name in the global technology industry and with over 150,000 employees across 49 countries, they bring best in class technology capabilities, global scale and a wide network of clients and partners across industries,” Wallis said.
“This acquisition represents an outstanding outcome for all DWS stakeholders: shareholders, employees, clients and other business partners.”
The transaction is expected to close in December 2020, subject to closing conditions, including regulatory approvals. Loftus Lane Capital Partners was the exclusive advisor to DWS on the deal.
In late 2018, HCL made a splash by acquiring a number of IBM’s software products for US$1.8 billion. The seven products include secure device management product BigFix, marketing automation product Unica and workstream collaboration product Connections.