As reported by a leading financial daily, HCL Technologies (Shiv Nadar group) has finalised a mergers and acquisitions (M&A) strategy ahead of its initial public offering (IPO).
HCL Tech. will target companies in the US$ 20-200 m range. The target companies will be integrated with HCL Tech.'s business model. The company plans to utilise a substantial part of its issue proceeds for acquisitions/mergers and strategic alliances in India and abroad.
HCL Tech. will target companies with interests in e-commerce, web-enabled technologies, business consulting, infotech consulting, system integration, application development, and enterprise resource planning (ERP) consulting and implementation. Merchant banking sources reveal that the company is open to acquisitions in the US, Europe, Canada, Australia, Korea, New Zealand and Japan.
Like its software peers, HCL Tech. has resorted to M&As to boost growth. It will adopt the 'soft approach' in its M&As, which means that it will mesh the culture and set-up of the target company with its own culture.
M&As in different countries will allow the company access to global markets. Expansion through the M&A route is easier than setting up wholly-owned subsidiaries. A large number of Indian software companies have realised this and have earmarked funds for acquisitions.
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