HCL Tech Acquires Geometric’s IT Services Unit

The acquisition adds more than 2000 employees to HCL Tech that will bolster its engineering services portfolio.

outsourcing

HCL Technologies has agreed to acquire the IT services business of Geometric in an all-stock deal valued at $186 million, bolstering its engineering and automotive services portfolio. In another deal, Mumbai-based Geometric has also offloaded its 58% stake in 3DPLM to France’s Dassault Systemes.

With 2,606 employees in 13 global delivery locations across the world, Geometric specializes in providing IT consulting services to engineering firms. It will also augment HCL Technologies’ automotive and industrial practices. Analysts say the acquisition can boost HCL Tech’s overall revenue by about 2%.

“[The deal] provides several cross-sell and up-sell opportunities as the customers will benefit from a unique services portfolio of end-to-end engineering, R&D, digital technologies. and internet of things capabilities,” said G.H Rao, HCL Tech’s president of engineering and R&D services. “With the 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.”

More than expertise in engineering service, some analysts say HCL Tech is interested in tapping Geometric’s U.S. and European clients. HCL already has a strong foothold in the engineering R&D segment, which contributed 18.6% of its business in the December-ended quarter.

Deals of this kind confirm that Indian IT outsourcing firms are diversifying away from servicing deals to a higher-margin digital business. Possibly, the rise of cloud and automation services is holding back mid-sized IT companies from scaling up. Therefore, many of them have been put up for sale. This could have been the reason, some analysts say, behind the sale of iGate and Hexaware.

Other than HCL Technologies, Tech Mahindra, France-headquartered Altran Technologies, and the $12 billion U.S.-based Allegis Group too had made bid to acquire Geometric.

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