HCL Made Cash Offer In A Bid To Buy Axon
HCL Technologies (HCL), an India based IT service company, announced that it has made a cash offer for a leading UK based SAP consulting company, Axon Group (Axon). Under the terms of the offer, Axon shareholders will receive 650 pence in cash for each Axon share valuing the entire issued and to be issued share capital of Axon at approximately £441.1 million including an interim dividend of 2.25pence.
“HCL's transformation journey enters an exciting phase where we are creating partnerships with high performance teams to become significant in our chosen areas of growth. We see Axon as one such transformational opportunity for HCL to become a significant player in the SAP services space. I am excited about the high performance and employee centric cultural synergy between HCL and Axon that would help accelerate the process of integration between the two teams”, said Vineet Nayar, CEO and member of the board, HCL Technologies.
Commenting on the strategic fit between HCL and Axon, Ram Krishna, Corporate Vice President, Enterprise Application Services, said “The merger of Axon's strong implementation capabilities with HCL's strong application and infrastructure management capabilities will help us deliver unique value on an end to end basis for the customers of HCL and Axon. The positive interactions between the HCL and Axon management teams since July 08, reinforces my belief that we will come together and create significant incremental value for both our customers and employees.”
Anil Chanana, Executive Vice President, Finance of HCL Technologies, said, “HCL has identified eight focus areas for growth including enterprise application services. For inorganic growth in these areas, HCL follows a thorough and diligent selection process of pro-actively identifying acquisition opportunities, and evaluating them rigorously against our long term strategic growth objectives to create incremental shareholder value.”
Axon provides process consultancy services to large organisations that have chosen SAP as their strategic enterprise platform. It has a diversified customer base across the United Kingdom, North America, and Asia that is complementary to HCL's own customer base. It has approximately 2,000 employees, who bring in-depth industry expertise and best practices to address the challenges faced by organisations in today's dynamic environment.
For the year ended 31 December 2007, Axon reported profit before taxation of £29.5 million on revenues of £204.5 million.
The combined strengths of HCL and Axon provide a number of potential benefits and opportunities:
Axon has a high performance and employee centric culture that fits in well with HCL's “Employee First” philosophy
Axon's process consulting and implementation capabilities complements HCL's application and infrastructure management capabilities
HCL's services / industry offering will create value for Axon's diversified blue chip customer base with a strong position in the UK public sector and other defensive sectors
HCL's strong SAP presence in the US and Asia complement Axon's excellent position in the UK
HCL's position as a ‘Global Services Partner ‘of SAP will strengthen Axon's ability to win more transformational customers