The country?s fourth largest IT services firm, HCL Technologies, said on Tuesday that it has bagged a five-year, $500-million contract from the US-based research-driven pharmaceutical firm, MSD (Merck & Co). The firm said the deal was the result of an extended relationship with the US company since 2004. Under the agreement, HCL would provide software-led IT solutions, remote infrastructure management, engineering, business and knowledge process services to Merck.

HCL will extend its relationship with the US pharmaceutical firm to become an integral business and technology services partner, HCL Technologies said in a filing with the BSE.

Prem Kumar, president (BFSI and healthcare) at HCL Technologies, said: ?The deal comes at a fair price in the current market situation. In 2007, we had bagged a contract of $150 million from Merck. With this contract, we expect to extend our work on integration of Merck with Schering-Plough.?

On the back of the deal announcement, HCL Tech shares on the Bombay Stock Exchange surged by about 2% to Rs 398.35 on Tuesday. The firm said it would expand its US operations and hire local staff in a bid to deliver services to Merck. ?We would deliver services from about 20 centres globally including North Carolina, Poland, China and Brazil to Merck,? Kumar added.

?For five years, MSD has leveraged HCL’s extensive expertise in life sciences and healthcare to streamline operational efficiencies and consolidate its IT portfolio,? MSD vice-president (application services) Richard G Branton said.

MSD will leverage HCL’s near-shore delivery network in the US. As a result of this engagement, HCL will expand its US team in North Carolina, relying on local hires to staff projects, it said.

“This is a landmark win for HCL and we are proud that our growing leadership in pharmaceutical and healthcare, coupled with our previous delivery for MSD has positioned HCL as a strategic partner for MSD,” HCL President (Americas) Shami Khorana said.

However, Kumar refused to disclose whether the firm was witnessing an increase in contract sizes across the healthcare space or whether this was a one-off deal. ?We expect US payers and providers to open up as they need the core infrastructure upgradation,? he added. Healthcare currently contributes about 8-9% to HCL Technologies? revenues.