HCL to acquire seven IBM software products for $1.8 billion

HCL Technologies, the country’s third largest software services firm, is acquiring select IBM software products for $1.8 billion. The transaction is expected to close by mid-2019, subject to completion of applicable regulatory reviews, HCL stated in a release.

IBM and HCL Technologies (HCL) today announced a definitive agreement under which HCL will acquire select IBM software products for $1.8 billion. 
HCL Tech said the deal that includes seven software products represents a total addressable market of more than $50 billion. These include:
  • Appscan for secure application development,
  • BigFix for secure device management,
  • Unica (on-premise) for marketing automation,
  • Commerce (on-premise) for omni-channel eCommerce,
  • Portal (on-premise) for digital experience,
  • Notes & Domino for email and low-code rapid application development, and
  • Connections for workstream collaboration.

HCL and IBM have an ongoing IP partnership for five of these products, it added.

“We continue to see great opportunities in the market to enhance our Mode-3 (products and platforms) offerings. The products that we are acquiring are in large growing market areas like security, marketing and commerce which are strategic segments for HCL. Many of these products are well regarded by clients and positioned in the top quadrant by industry analysts,” said C Vijayakumar, president and CEO, HCL Technologies.
“The large-scale deployments of these products provide us with a great opportunity to reach and serve thousands of global enterprises across a wide range of industries and markets. I am confident that these products will see good growth trajectory backed by our commitment to invest in product innovation coupled with our strong client focus and agile product development. In addition, we see tremendous potential for creating compelling ‘as-a-service’ offerings by combining these products with our Mode-1 and Mode-2 services,” he added.
Armonk, New York-based IBM has been, over the last four years, prioritising investments to develop integrated capabilities in areas such as AI for business, hybrid cloud, cyber security, analytics, supply chain and blockchain as well as industry-specific platforms and solutions, including healthcare, industrial IOT, and financial services, John Kelly, IBM senior vice president, Cognitive Solutions and Research, said, adding, “These are among the emerging, high-value segments of the IT industry...., IBM is a leader in these segments today”.
“We believe the time is right to divest these select collaboration, marketing and commerce software assets, which are increasingly delivered as stand-alone products. At the same time, we believe these products are a strong strategic fit for HCL, and that HCL is well positioned to drive innovation and growth for their customers,” he further added.
HCL Technologies (HCL), one of the leading global technology and service providers, operates out of 43 countries and had consolidated revenues of $8.2 billion, for 12 months ended 30 September 2018.