HCL Technologies Ltd — M&A Activity 2022

Jan 14, 2022

January 14, 2022

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The General Manager The Manager BSE Limited National Stock Exchange of India Limited Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers Exchange Plaza Dalal Street 5th Floor, Plot No. C-1, Block-G Mumbai- 400 001 Bandra-Kurla Complex, Bandra(E) Mumbai-400 051 BSE Scrip Code: 532281 NSE Scrip Code: HCLTECH

– “ Subject: Release HCL Technologies Acquires Hungarian Data Engineering Services Company Starschema”

Dear Sir/ Madam,

Enclosed please find a release on the captioned subject being issued by the Company today along with a disclosure in terms of Regulation 30(4) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

This is for your information and records.

Thanking you,

Yours faithfully, For HCL Technologies Limited

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Manish Anand Company Secretary

Encl:a/a

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HCL Technologies Acquires Hungarian Data Engineering Services Company Starschema

BUDAPEST, HUNGARY and NOIDA, INDIA – Jan. 14, 2022: HCL Technologies (HCL), a leading global technology company, signed a definitive agreement for the acquisition of Starschema, a leading provider of data engineering services, based in Budapest, Hungary. The strategic acquisition will bolster HCL’s capability in digital engineering -- driven by data engineering -- and increase its presence in Central and Eastern Europe.

Starschema provides consulting, technology and managed services in data engineering to Global 2000 companies in the U.S. and Europe.

The acquisition combines Starschema’s high-value capabilities and data-focused expertise with HCL’s existing presence in industry segments undergoing data-driven transformation. In addition, HCL will strengthen its position in data engineering, which is an integral part of the company’s digital engineering capabilities and next-generation offerings.

“Joining HCL will enable us to keep our strategic focus and expand our data engineering capacity to provide a greater breadth and depth of services to clients,” said Tamas Foldi, Founder and CEO, Starschema. “As part of HCL’s full spectrum of technology services, we will leverage our expertise in data engineering and emerging data technologies to solve companies’ data challenges, through building fast, scalable solutions that make people more effective and companies more profitable. This strategic move also represents exemplary career growth opportunities for our people.”

“Starschema will strengthen our data engineering capabilities, providing us with the ability to leverage its solutions and talent in Central and Eastern Europe,” said Vijay Guntur, President, Engineering and R&D Services, HCL Technologies. “Starschema’s capabilities will further scale HCL’s data engineering competencies at our integrated delivery centers across the world. Engineering talent will continue to remain in high demand, and Starschema offers a specialized talent pool in a strategic growth area for HCL. Following the acquisition, HCL will be able to offer data engineering consulting and near-shore access to digital engineering services to a wide base of clients.”

The transaction is subject to regulatory clearance from the Hungarian Ministry of Innovation and Technology and is expected to close in March 2022.

About HCL Technologies

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HCL Technologies (HCL) empowers global enterprises with technology for the next decade, today. HCL’s Mode 1-2-3 strategy, based on its deep-domain industry expertise, client-centricity and entrepreneurial culture of Ideapreneurship™, enables businesses to transform into next-gen enterprises.

HCL offers its services and products through three business units: IT and Business Services (ITBS), Engineering and R&D Services (ERS) and Products & Platforms (P&P). ITBS enables global enterprises to transform their businesses through offerings in the areas of applications, infrastructure, digital process operations and next-generation digital transformation solutions. ERS offers engineering services and solutions in all aspects of product development and platform engineering. P&P provides modernized software products to global clients for their technology and industry-specific requirements. Through its cutting-edge co-innovation labs, global delivery capabilities and broad global network, HCL delivers holistic services in various industry verticals, including Financial Services, Manufacturing, Technology and Services, Telecom and Media, Retail and CPG, Life Sciences and Healthcare, and Public Services.

As a leading global technology company, HCL takes pride in its diversity, social responsibility, sustainability, and education initiatives. For the 12 months ended September 30, 2021, HCL had consolidated revenue of $10.82 billion. Its more than 187,000 ideapreneurs operate out of 50 countries.

For more information, visit www.hcltech.com

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About Starschema

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Starschema believes that data has the power to change the world and data-driven organizations are leading the way. Fortune 100 and smaller companies rely on Starschema to help them use data to make better business decisions, build smarter products, and deliver more value for their customers, employees and investors. The Starschema team digs into customers’ toughest business problems, designs and deploys solutions, builds the technology and provides managed data services needed to compete and profit in a data-driven world. Find out more at Starschema.com

Forward–looking Statements

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Certain statements in this release are forward-looking statements, which involve a number of risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those in such forward-looking statements. All statements, other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to the statements containing the words 'planned', 'expects', 'believes’,’ strategy', 'opportunity', 'anticipates', 'hopes' or other similar words. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding impact of pending regulatory proceedings, fluctuations in earnings, our ability to manage growth, intense competition in IT services, business process outsourcing and consulting services including those factors which may affect our cost advantage, wage increases in India, customer acceptances of our services, products and fee structures, our ability to attract and retain highly skilled professionals, our ability to integrate acquired assets in a cost-effective and timely manner, time and cost overruns on fixed-price, fixed-timeframe contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, the success of our brand development efforts, liability for damages on our service contracts, the success of the companies /entities in which we have made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property, other risks, uncertainties and general economic conditions affecting our industry. There can be no assurance that the forward-looking statements made herein will prove to be accurate, and issuance of such forward-looking statements should not be regarded as a representation by the Company, or any other person that the objective and plans of the Company will be achieved. All forward-looking statements made herein are based on information presently available to the Management of the Company and the Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.

For further details, please contact:

HCL Technologies

Meenakshi Benjwal, Americas meenakshi.benjwal@hcl.com

Elka Ghudial, EMEA elka.ghudial@hcl.com

Devneeta Pahuja, India and APAC devneeta.p@hcl.com

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Disclosure under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

1	Name of the target entity, details in brief such as size, turnover etc.;	HCL Hungary Kft, a wholly owned step-down subsidiary of HCL Technologies Limited, is acquiring 100% stake in Starschema Kereskedelmi és Szolgáltató Korlátolt Felelősségű Társaság, a limited liability company incorporated in Hungary (“Starschema”) The target company had revenues of USD 13.6m for the year ended Dec 31, 2020
2	Whether the acquisition would fall within related party transaction(s) and whether the promoter/ promoter group/ group companies have any interest in the entity being acquired? If yes, nature of interest and details thereof and whether the same is done at “arm’s length”;	No
3	Industry to which the entity being acquired belongs;	Technology – Data Engineering
4	Objects and effects of acquisition (including but not limited to, disclosure of reasons for acquisition of target entity, if its business is outside the main line of business of the listed entity);	With this acquisition, the Company would get 1. Capabilities and solutions in Data Engineering which will accelerate the growth of Mode 2 services in Digital Engineering. 2. Near-shore Eastern European presence and ability to scale. 3. Strong management team and complementary customers in Engineering and R&D Services (“ERS”) ecosystem. 4. Access to Starschema customers which are of strategic interest to HCL’s Engineering and R&D business.
5	Brief details of any Governmental or regulatory approvals required for the acquisition;	The transaction will require a clearance under LVIII of 2020 on the temporary measures applicable to the termination of the state of emergency and the preparedness for pandemics (“FDI Clearance”) from Ministry of Innovation and Technology, Hungary.

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6	Indicative time period for completion of the acquisition;	Expected close March 2022
7	Nature of consideration - whether cash consideration or share swap and details of the same;	Cash consideration
8	Cost of acquisition or the price at which the shares are acquired;	Total Purchase price: $42.5 million.
9	Percentage of shareholding / control acquired and / or number of shares acquired;	HCL will purchase 100% stake in the company
10	Brief background about the entity acquired in terms of products/line of business acquired, date of incorporation, country in which the acquired entity has presence and any other significant information (in brief);	▪ Founded in 2006, Starschema is one of the leading Data Engineering services firm in Eastern Europe with delivery presence in Hungary and some US sales presence ▪ Maximizing value from data through data engineering consulting and solutioning ▪ Over 200 engineers are part of the transaction ▪ Revenue for the past three years: oCY2020 – USD 13.6m oCY2019 – USD 12.9m oCY2018–USD 11.1m

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