New Delhi, Sept 3: Armed with $300 million incash reserves, infotech company HCL Technologies (HCLT) is in the process of acquiring companies in both Europe and the US as part of its expansion drive. "Our M&A team is evaluating options/bids to acquire companies in Europe and the US which have strong technology, network services orientation and a quality client base," HCLT executive vice-president Vineet Nayar said.He said using the mergers and acquisition route is one of the three options HCL has taken up to give further impetus to revenues as well as earnings growth. "There are three distinct routes HCLT has adopted to achieve better revenue and earning growth-value, acquisition, alliances and partnerships besides the merger and acquisition route," Mr Nayar said adding the company will use multiple-growth windows to supplement organic growth through diverse acquisitions.
The main areas HCLT is looking to supplement via the M&A route include Wireless Access Protocol (WAP), Blue Tooth and semi-conductor yield management besides things like domain expertise and even financial services, Mr Nayar said. For the 12-month period ending June 2000, HCLT declared Rs 233.2 crore net profit at a turnover of Rs 925.6 crore, which is growth of about 140 per cent over the previous year.
HCL Technologies said it had invested $8.8 million forging strategic partnerships with five technology funds with a total corpus of $1 million to $1.5 million as part of its emerging technology acquisition strategy in the last quarter of 1999-2000, Mr Nayar said.
"Based on an initial success we expect to invest moreover the next five years, targeting a corpus of multi-million dollars in emerging technology acquisitions," he said.
In the area of what the company calls value-acquisition,it has invested another $2 million in acquiring in a new way Internet Service Provider (ISP) Harmony, he said adding the purpose of these acquisitions is to identify emerging technologies in web based service companies.
Mr Nayar said it was a reflection of the company's growth strategies that it had decided to go in for a 2:1 stock split to further enhance value for the shareholders as well as employees. HCL Technologies is likely to offer a 2:1 stock split for its 27.95 crore equity shares, following which each shareholder will receive two equity shares of par value Rs two forevery share of Rs four par value held on the record date.
"The board of directors is considering a 2:1 stock split to make the HCLT share more affordable for retail investors as well as employees of the company, leading to increased retail interest and higher liquidity," Mr Nayar said.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.