HCLTech to acquire German auto tech company ASAP Group for ~EUR 251.1 million

HCL Technologies (HCL Tech) on Wednesday signed a definitive agreement to acquire a 100% equity stake in ASAP Group, a Germany-based automotive engineering services provider for a deal valued at 251.1 million euros (Rs 2,206 crore) by September 2023.

Headquartered in Ingolstadt, Germany ASAP is working on future-oriented automotive technologies in areas such as autonomous driving, e-mobility and connectivity. It counts top automotive original equipment manufacturers (OEM) and tier 1 suppliers in Germany among its customers, HCL Tech said in the filing.

ASAP’s services portfolio comprises electrics/electronics, software, consulting, service testing and validation and vehicle development. It employs over 1,600 people across 9 locations in Germany. The company posted a turnover of 154.3 million euros (Rs 1,355 crore) in 2022, a growth of 26 percent compared to 122.5 million euros (Rs 1,076 crore) a year ago.

Hari Sadarahalli, Corporate VP, Engineering and R&D Services, HCL Tech said, “Core engineering is at the heart of HCL Tech’s DNA and truly differentiates our services portfolio. ASAP has developed some exciting capabilities in automotive engineering, and we share their vision for the future of mobility. This agreement will enable us to scale these capabilities and innovations across our global network. This investment also reinforces our commitment to Germany, which is a focus market for us. We will continue to nurture local talent and innovation ecosystem to unlock their potential.”

Meanwhile, the company also announced its quarterly numbers yesterday. During Q1 FY24, HCLTech sustained its growth momentum despite the challenging global macro environment. INR revenue was at Rs 26,296 crore, up 12.1% YoY and down 1.2% QoQ. EBIT for the quarter was at Rs 4,460 crore, up 11.7% YoY and down 7.8% QoQ. 

Revenue in constant currency grew by 6.3% YoY and was down 1.3% QoQ. Services revenue grew by 7.1% in CC. HCLSoftware annual recurring revenue (ARR) came in at more than $1 billion, up 4.7% YoY (CC).

HCL Tech retained FY24 revenue guidance at 6-8% in CC and EBIT margin at 18-19%. The attrition rate for the quarter remained at 16.3%, down 7.5% YoY. The company announced a dividend of Rs 10 per equity share.

HCL Tech won 18 large deals—7 in services and 11 in software — during the quarter, translating into a total cumulated value (TCV) of new deal wins of $1.565 billion. The deal pipeline is at an all-time high and grew 17.7% QoQ and 26.2% YoY.

Source: Media reports