HCL Technologies (HCLTech) has formally announced a definitive agreement to acquire the Telco Solutions business from Hewlett Packard Enterprise (HPE) for a total consideration of up to $160 million. This strategic transaction, structured as an all-cash asset carve-out, was disclosed in a stock exchange filing on Thursday. The acquisition's financial terms include an initial purchase price, with an additional $15 million incentive tied to specific performance metrics for the 2025 fiscal year.

The acquisition process is anticipated to conclude in approximately six months, contingent upon standard closing conditions and necessary regulatory approvals, including clearance from the Committee on Foreign Investment in the United States (CFIUS). This latest move by HCLTech builds upon a previous transaction in 2024, where the company acquired assets from HPE’s Communications Technology Group (CTG), further solidifying its presence in the telecommunications sector.

The HPE Telco Solutions business slated for acquisition is substantial, currently supporting over 1 billion devices across 200 global deployments. According to HCLTech's official statement, the acquired business brings a robust suite of critical capabilities. These include Operations Support Systems (OSS), advanced 5G Subscriber Data Management (SDM) and Home Subscriber Server (HSS technologies, as well as sophisticated AI-driven network automation solutions specifically designed for closed-loop network monetization.

HCLTech intends to leverage this expanded engineering capacity and valuable intellectual property to significantly accelerate its initiatives in various cutting-edge areas. These include 5G network transformation, network cloudification, the development of Network as a Service (NaaS) offerings, autonomous networking, Service Management and Orchestration (SMO), and the advancement of AI-led and AI-native networks for Communication Service Providers (CSPs) globally.

Anil Ganjoo, Chief Growth Officer and Global Head of TMT at HCLTech, described this as a strategic move. He expressed excitement about the opportunities ahead, stating that HCLTech is uniquely positioned to empower CSPs in their transformation into true technology companies, effectively advancing the shift from 'telcos' to 'techcos.' Ganjoo further emphasized that integrating the highly skilled HPE team and their market-proven IP will strengthen HCLTech's product-aligned model and accelerate its transition towards higher-value, IP-led services and non-linear growth.

Rami Rahim, Executive Vice President and General Manager of Networking at HPE, also commented on the industry impact of the deal. He conveyed confidence in HCLTech's compelling vision for enabling CSPs, believing it will harness the Telco Solutions business’s momentum and proven track record of customer success to further accelerate innovation and customer impact. Rahim concluded by stating his belief that both customers and team members will find HCLTech to be the appropriate home to continue their success for years to come.