HCL Tech to acquire Aalayance

BANGALORE: HCL Technologies has acquired a 19 percent stake (15 percent on a fully diluted basis) through an issue of additional equity for a total consideration of $0.45 million. At a later stage, the balance stake may be acquired within the next four years, subject to the achievement of a specified revenue milestone, at a valuation based on the profitability parameters of Aalayance, informed the company through a media release. Once through the alliance brings 109 professionals, including 88 billable engineers with competency in the EAI space to HCL Tech. SSKI Corporate Finance Private limited on this transaction has advised HCL Tech.

Aalayance is a US based $4.5 million Company in the Enterprise Application Integration (EAI) and Business Integration (BI) space. The alliance will enable HCL Tech to further consolidate its expertise in the area of Enterprise Application Integration services, predicted to be a rapidly growing area in the next few years.

Forrester Research estimates that organizations today spend 40 percent of their IT budgets on the design, development and maintenance of integration solutions for their packaged, custom, and legacy enterprise applications. According to a recent Gartner Dataquest report too, the global EAI services market is estimated at $56 billion, with the potential to grow to $98 billion, registering a CAGR of 15 percent over the next two to three years.

Aalayance provides product lifecycle oriented software development services to application development houses and EAI and BI deployment services to Global 1000 firms. Aalayance Inc. was established in January 2000 in San Jose, while its Indian subsidiary was incorporated in December 1999 as a separate entity in Bangalore. The main service offerings comprise EAI and BI deployment services, software product development lifecycle services as well as solutions in select verticals namely, Healthcare, Telco and Retail.

Aalayance, CEO, Chairman and co-founder, Vikram Duvvoori said, "We see this alliance with HCL Tech as a major step towards consolidating Aalayance’s credibility and credentials in the global marketplace. HCL Tech’s global footprint, technology competency and established reputation will prove key enablers, providing us the stability and support to pitch for large business in the future."

HCL Tech, COO, S Raman, commented, "The EAI market represents one of the fastest-growing opportunities over the next three years and we will continue to supplement and widen our offerings in this space. Given Aalayance’s expertise in EAI and their considerable experience with TIBCO, we believe that together we can provide enhanced value to our customers as well as explore and execute on new areas of growth."