HCL, Perot part ways for $105 m

TEXAS: Perot Systems Corporation, today announced that it has purchased HCL Technologies’ shares in HCL Perot Systems (HPS), a joint venture formed by the two companies in 1996. Perot Systems purchased HCL’s stake in HPS for a gross purchase price of approximately $105 million in cash. HPS’ assets included approximately US$45 million of cash and short-term investments as of November 30, 2003.

HPS is an IT services firm specializing in business transformation and application outsourcing. HPS currently serves customers in the UK, Singapore, Switzerland, Luxembourg, Germany, India, Thailand, Malaysia, Japan, Australia and the United States. HPS, a CMMI Level 5 company is based in Noida and with more than 2,000 employees.

Perot Systems and HCL formed the joint venture with a combined capital investment of US$4.5 million. For the first nine months of 2003, HPS reported US$78.7 million revenue and US$9.3 million net income, stated a company press release.

Ross Perot, Jr., president and CEO of Perot Systems, said, "HPS has been an important part of our onshore/offshore delivery model for more than six years. Acquiring HPS was the next logical step in the development of our onshore/offshore application outsourcing model. Not only does this expand our global software team, but it also provides us with new clients to serve, and expands our geographic footprint."

Perot Systems will now consolidate the results of HPS. Prior to completing this transaction, Perot Systems recorded its pro rata share of HPS’ earnings using the equity method of accounting, according to the press release.