HCL Technologies will buy seven IBM software businesses for $1.8 billion

The products being acquired by HCL will contribute to the Company’s strategic segments — security, marketing and commerce.

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Indian IT services company, HCL Technologies, will acquire seven of IBM’s businesses at the cost of $1.8 billion. The selected businesses are focused on the human resources and e-commerce markets. The software products it is acquiring represent a total addressable market of over $50 billion.

The transaction, which covers products, such as Unica (on-premise), Appscan, BiFix, Commerce, Portal (on-premise), Connections and Notes & Domino will be completed by the middle of next year. However, the ongoing licensing pact between IBM and HCL will continue for five of these products. IBM will be focusing on strengthening its hybrid cloud computing wing. To further this effort, IBM had acquired Red Hat, a specialist in this field, in a $34 million deal.

The products being acquired by HCL will contribute to the Company’s strategic segments, that is, security, marketing and commerce. Once the deal comes through, although the revenue will go down owing to the transition phase in the first year, in the second year, the revenue is expected to increase to $650 million.

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