HCL Tech Makes an Acquisition in the German Automotive Industry

/ July 2, 2018/ Automotive, Digital Manufacturing, Germany, HCL Tech, IT services, M&A (large, with revenues above $50m), Mechanical Engineering, PLM, Technical documentation, VW

The star of ER&D services, HCL Tech, has acquired Hönigsberg & Düvel Datentechnik GmbH  (H&D), a German IT services and ER&D vendor servicing mostly the automotive sector. H&D provides IT infrastructure services, application and embedded software services, and manufacturing systems, as well as services around SAP, and CAx systems.

H&D is headquartered in Wolfsburg, had in 2017 revenues of EUR 74m, and has 1.4k FTEs across 13 sites in Germany (Dresden, Hannover, Osnabrück, Gifhorn, Ingolstatard, Wolfsburg), the US, Czech Republic, and Poland. The company’s main delivery center is also in Wolfsburg, which is the same city where VW is headquartered. Incidentally, it looks like VW is the largest client of H&D.

HCL Tech is consistent in its conquest of the automotive sector, after the acquisition of Volvo IT, the IT services captive of Volvo Group (the manufacturer of trucks, not cars), and with Geometric (48% of revenues were from the automotive sector), in PLM services. The company is paying a limited amount for H&D, EUR 30m in cash. This suggests that H&D had limited profitability. But the potential for growth with VW is enormous, especially since VW is still paying the price for the Dieselgate.

How much of an ER&D service firm is H&D? It is unclear. We will look into it. Overall this is bad news for Bertrandt, as HCL Tech will be keen on cross-selling its full breadth of services, from IT services to ER&D services.



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