Godrej may sell Geometric to HCL Technologies

BENGALURU: Billionaire Shiv Nadar-controlled HCL Technologies has emerged as the front-runner to acquire Geometric in a deal valuing the IT consulting company at about $200 million. HCL is expected to acquire 38% stake held by Geometric's principal share holders -- Godrej family and CEO Manu Parpia -- giving them control of the Mumbai headquartered company, people directly familiar with the matter said.

The deal-making was in final stages and a formal announcement would come shortly. Ace investor Rakesh Jhunjhunwala and his wife who together own 19%, are likely to sell or pare their hol dings in separate open mar ket transactions with the ac quirer. India's fourth largest software exporter HCL Technologies is expected to merge Geometric with itself. JM Financial is advising Geometric on the transaction.

Geometric started as part of the Godrej Group in 1984 and was spun off into an independent company a decade later. The company's portfolio covers global engineering services, product lifecycle management (PLM) solutions, embedded systems solutions and digital technology. It reported $181.4 million in revenue for the 2014-15 financial year and employs 4,800 people across 13 global delivery locations in the US, France, Germany, Romania and China, apart from India.

TOI last year had reported on Geometric starting a sale process, attracting the interest of several strategic bidders including HCL. The Geometric acquisition is expected to tap synergies in engineering services and PLM solutions. HCL is betting big on engineering services as its growth engine which has crossed over $1 billion in revenue already. Geometric counts Dassault Systemes and Chrysler as some of its top customers.

HCL Technologies said it does not want to comment. Geometric stated it would not comment on market rumours and speculation. Godrej holds little over 31% stake through Godrej & Boyce Manufacturing Company and Godrej Investments, while Manu Parpia and his family owns just under 7%, listing them as promoters.

Geometric is aggressively expanding engineering services and PLM software in North America and Japan. It has a long-standing relationship with Dassault to offer services implementation, migration, upgrade and maintenance of the latter's products. The company has industry veteran Louis Pascarella as the chief tech officer to define the company's tech nology direction and build new-age solutions.

HCL may pay a premium to the current share price of Geometric, though TOI could not ascertain the financial details of the transaction. Geometric shares ended 5.3% higher at Rs 153 in Mumbai, giving the company a market value of around $150 million.The stock has had a 52-week high of Rs 207 and a low of Rs 101. HCL Technologies shares ended 2.4% higher at Rs 832 on Tuesday .

HCL's recent acquisitions include US-based PowerObjects, a leading North American provider of Microsoft Dynamics CRM, and Point to Point Products, a worldplace engineering services company in the UK. Its biggest deal was the $785-million takeover of British consulting company Axon in 2008.