The Hindu Business Line : HCL Tech buys US-based CapitalStream for $40 m

Synergy Booster
FinanceCenter’s a financial tool in business automation and banking
CapitalStream to become a 100 per cent subsidiary of the Indian company.
US company complements HCL’s lending technology capabilities.

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New Delhi, Feb. 20 HCL Technologies Ltd, India’s fifth largest IT services company, on Wednesday acquired US-based CapitalStream Inc, in an all-cash deal of about $40 million, to enhance its presence in financial services sector. Capital Stream – which provides end-to-end lending and straight through processing solutions to commercial banks and finance companies in North America, including prospecting and sales, credit analysis, due diligence, documentation and portfolio monitoring – has about 100 professionals and had clocked revenue of about $21 million in 2007.

Benefits

The acquisition is expected to enhance HCL’s ability to provide end-to-end solutions through product and multi-service delivery capability to commercial and retail financial institutions. In a statement issued here, HCL said that the addition of a focused product portfolio to its multi-service capability would enable it to provide commercial banks and other financial institutions with a comprehensive end-to-end solutions globally, with significantly reduced implementation time. In addition, the offerings from CapitalStream complements HCL’s lending technology capabilities in financial services.

Credit Tool

CapitalStream solutions accelerate the origination and management of commercial credit relationships to enable mid-market and small business lending, equipment finance and commercial lending operations to double or triple transaction through-put with no increase in headcount, the statement pointed out. FinanceCenter, CapitalStream’s main product, is a multi-tier, web-based application and is a leading solution for the automation of business and commercial lending institutions. FinanceCenter can be customised and delivered to different segments of financial industry from large to mid-tier banks to credit unions. The product is is used by over 20 per cent of the top banks in North America.

Global Reach

Commenting on the development Mr Kevin Riegelsberger, CEO of CapitalStream, said: “We see this as a great opportunity for CapitalStream to leverage HCL’s global reach and to cross sell our product portfolio with their multi-service offerings. At the same time, CapitalStream clients gain access to HCL’s business process and technology skills and global resources.”

Mr Premkumar S., Corporate Officer & Global Head - Financial Services, HCL, said that Capital Stream would become a 100 per cent subsidiary of HCL. “The intent was not to add scale, which we could have grown organically but to provide value to clients. CapitalStream has the unique blend of strong product and technology in the commercial banking space, a team that is as committed to value delivery to its customers as HCL, and above all, a portfolio that lends itself to offer integrated solutions. This will enhance our capability in the financial services sector to deliver large scale enterprise solutions. The modular architecture would also help HCL to localise the platforms across various global financial centres.”

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