Acquisition of Axon by HCL Technologies Limited
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Case Details:
Case Code : BSTR321
Case Length : 17 Pages
Period : 2008
Pub Date : 2009
Teaching Note :Not Available
Organization : HCL Technologies Limited, AXON Group Plc
Industry : Information Technology
Countries : India/UK
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Background Note
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HCL TECHNOLOGIES
Founded in August 1976, HCL Enterprises, also known as Hindustan Computers Limited earlier, was started by Nadar in association with some other engineers , who had quit their jobs with Delhi Cloth Mill (DCM) to start a company with an initial investment of about Rs. 2 million...
AXON GROUP
Headquartered in Egham, Surrey, the Axon Group was founded by Mark Hunter, Donald Kirkwood, and Paul Manweiler in 1994. Mark Hunter, who led the group, gave up his secure job with SAP to start this venture...
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The Deal
HCL started negotiations for the acquisition deal in July 2008. Axon, at that time, was negotiating the deal simultaneously with both HCL and another Indian IT major, Infosys Technologies Limited (Infosys).
On August 25, 2008, it was Infosys, which first made an offer to acquire Axon
for £ 407 million at 600 pence per share of Axon. Infosys claimed that the price it was offering was a premium of 19.4% over the share price dated August 22, 2008, at 502.5 pence per share. Infosys seemed quite confident of its offer and said that it had the support of the management team of Axon as well.
Roy Merritt, Non Executive Chairman, Axon, commenting on the Infosys offer, said,
"The Board has taken the decision to recommend the acquisition by Infosys after careful consideration. Axon has successfully implemented its strategy to become one of the largest consultancies in the world focused exclusively on SAP and has generated a significant increase in shareholder value over the past five years...
Excerpts
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