In a move aimed at strengthening its position in the aerospace and defence engineering services space, IT service major HCL Technologies on Friday said that it will acquire Butler America Aerospace for $85 million in cash.
Butler Aerospace provides engineering, design services and aftermarket engineering services to US aerospace and defence customers, providing them services in areas of mechanical and structural design, electrical design, tool design and aftermarket engineering services.
The country’s fourth largest IT company said in a statement,
The consideration for the proposed transaction is $85 million, to be paid in cash. The proposed acquisition will exclude the staffing business of Butler America Inc.
Butler America Aerospace had revenues of $85.4 million for the year ending 31 December 2015. The transaction, when consummated, is likely to be EPS accretive, it added. With over 900 engineers and seven design centres in the US, Butler Aerospace has a marquee list of clients.
The acquisition will bolster HCL’s capabilities in this space and access to clients with large R&D spends, it said.
The acquisition, subject to regulatory approvals, including CFIUS approval in the US, is expected to be completed by 31 December 2016.
In other news , the IT services major confirmed the exit of Chief Executive Officer Anant Gupta, following which the company has elevated current Chief Operating Officer C Vijayakumar to the post.
Anant Gupta has decided to leave the company to pursue personal interests outside of HCL, it said in a statement
It added that the company was elavating C Vijayakumar as the President and CEO of the company with immediate effect. HCL Technologies Chairman and Chief Strategy Officer Shiv Nadar said,
Vijay has been a transformational leader in the company, leading from the front. His vision and flawless execution track record best positions him for taking our journey forward
To increase the momentum of the company's next generation services, Vijayakumar will further accelerate execution of Mode 1-2-3 strategy to grow the experience-based and business outcome-oriented next generation services, he added. Vijayakumar will continue to be based in the US. He had been elevated to the role of COO in July this year, taking on additional responsibility, besides heading infrastructure services.