HCL and AXON

HCL (Hindustan Computers Limited) : 

HCL (Hindustan Computers Limited) HCL, division of the Delhi-based IT company HCL is a $5 billion leading global Technology and IT enterprise The HCL Enterprise comprises two companies listed in India: 1.HCL Technologies is the IT and BPO services arm focused on global markets, 2.HCL Infosystems deals in the IT, Communication, Office Automation Products & System Integration arm focused on the Indian market.

HCL (Hindustan Computers Limited) : 

HCL (Hindustan Computers Limited) Vineet Nayar, CEO and Member of the Board. HCL has 58,000 employees of diverse nationalities, operating across 20 countries including 360 service centers in India. HCL has global partnerships with several leading Fortune 1000 firms, including several IT and Technology firms

Axon : 

Axon Axon is a successful and well-recognized SAP service provider, especially in Europe, with strong systems integration and IT consulting skills. Axon is a business transformation consultancy that designed, implemented and supported hundreds of successful programmes. It has offices in North America, Asia Pacific and Europe, They employ over 1650 people and deliver solutions in more than 30 countries across the globe.

: 

Axon have grown at an average of 34% every year for the last 5 years. For the year ended December 2007, AXON had revenues of $204.5mn HCL acquired Axon at £441 million. 10.3% shares of Axon from UK stock market.

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REASON FOR THE ACQUISITION The first is that HCL identified eight focus areas of growth for it to dominate focus areas that HCL had identified by 2012; SAP practice is one of the focus areas for HCL. Axon and HCL there are significant complementary services. It will generate 45% of revenue. Achieve growth in Enterprise Application Services (EAS). The fourth reason is because of the complementary verticals.

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The fifth reason is, HCL’s SAP relationship as global service provider can be extensively leveraged with Axon’s core SAP capabilities to drive larger transactions and larger growth. So, it is a merger of our SAP relationship and Axon’s capability to drive new business growth The sixth reason is that business decisions of SAP implementation worldwide are taken based on return on investment. The last reason we believe this is a great opportunity for HCL if it goes through, is because 60-70% of revenues of Axon comes from the top few customers.

Advantages caused due to acquisition : 

Advantages caused due to acquisition Increased penetration as a services provider in the very large SAP market with access to Axon's client list: Being an SAP partner creates an immense growth opportunity for HCL. Market offers a $35 billion-$37 billion opportunity for service vendors The Axon merger will allow HCL to tap into this large SAP market, particularly in Western Europe.

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2. Geographic reach: The acquisition increased penetration in Europe, mostly in the United Kingdom and also in the United States and Asia/Pacific

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3. Complementary skills with front- and back-end capabilities: Axon’s "transform the business" capability complements HCL’s "run the business "approach extremely well. This combination will be important in winning deals with large global enterprises.

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4. High tech and manufacturing: To date, the combined company has delivered more than 150 projects for over 90 customers around the globe with the help of a cadre of more than 550 practitioners. With more than 500 practitioners, HCL AXON will be able to derive benefits from fast-growing sector (where HCL previously had a very weak presence) along with a strong U.K. presence.

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Disadvantages: Need to address some geographic gaps: eg:The combined entity continues to be comparatively weak in France and Germany 2. The new entity must take efforts to grow its resources and capabilities to meet the global needs of these large customers