HCL Technologies Acquires Capital Stream, Inc., a US-Based Industry Leader in Lending Automation Solutions
posted in Outsourcing News and Top Outsourcing deals, Outsourcing to India |Source: www.earthtimes.org
HCL Technologies today announced the acquisition of Capital Stream, Inc., a US-based leader in providing comprehensive 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. The acquisition is an all cash deal worth approximately US$40 million.
HCL’s transformation journey is focused on creating customer value in select industry verticals combining domain depth, innovative multi service offerings and business models that focus on output and outcome. This philosophy is also reflected in HCL’s acquisition strategy, which is proactive and selective focused on achieving long term goals and to invest in companies and platforms that will create more value in key vertical sectors and micro verticals. HCL follows a thorough and diligent selection process while choosing the targets for acquisition, and looks at it from a long-term strategic intent as opposed to being opportunistic.
This strategic acquisition of Capital Stream enhances HCL’s ability to provide end-to-end solutions through product and multi-service delivery capability to commercial and retail financial institutions. FinanceCenter, CapitalStream’s flagship product, is a multi-tier, web-based application and is a leading solution in the market today for the automation of business and commercial lending institutions. FinanceCenter can be customized and delivered to different segments of financial industry from large to mid-tier banks to credit unions. The product is currently used by more than 20% of the top banks in North America and has transformed several large and mid-tier banks.
CapitalStream has helped leading financial institutions to improve relationships, streamline operations, reduce risk and achieve significant revenue growth. 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 throughput with no increase in headcount.
The HCL acquisition of CapitalStream provides a number of synergies, benefits and opportunities, including:
– The addition of a focused product portfolio to HCL’s multi-service
capability will enable the company to provide commercial banks and other
financial institutions comprehensive end-to-end solutions globally, with
significantly reduced implementation time;
– The offerings from CapitalStream complements HCL’s lending technology
capabilities in financial services.
Commenting on the acquisition, Mr. Ramkrishna, Corporate Vice President, Head Mergers & Acquisitions, IT Services, said, “This acquisition is part of a well structured M&A strategy to fulfill HCL’s aspiration to be a global leader in selected industry verticals by using acquisition to either bridge gaps or enhance the capabilities in our service offerings.”
Premkumar. S, Corporate Officer & Global Head - Financial Services, HCL Technologies Ltd. said, “CapitalStream has the unique blend of a superior 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 localize the platforms across various global financial centers.”
“We have been using CapitalStream solutions since 2002 and have since grown our banking operation from 193 branches to over 700 branches and commercial banking offices. CapitalStream has been a key partner in our success by helping us significantly reduce the time and cost to approve and process a new loan,” said Debra Fournier, Senior Vice President for BusinessLink at Bank of the West, one of the 25 largest banks in the US. “The acquisition will now allow banks outside of North America to take advantage of CapitalStream’s innovative software solutions and should also offer us greater access to integrated services and technologies from HCL.”
Patricia Hines, Senior Analyst for Wholesale Banking at TowerGroup, said, “As outlined in TowerGroup Research Note ‘2008 Top 10 Business Drivers, Strategic Responses, and IT Initiatives in Wholesale Banking,’ the top business drivers in wholesale banking and commercial lending for 2008 include risk mitigation, regulation, revenue growth, declining profitability, and inefficient processes, which are driving technology initiatives to improve relationship management tools, create workflow tools for straight through processing, and enhance data management and analytics. As banks evaluate commercial and business lending software investments, they look for providers with robust technology, deep domain expertise, strong financial results, and satisfied clients. Providers that combine proven technology, extensive industry experience, and strong business process management skills help banks maximize the benefits from investments in loan origination technology.”
Kevin Riegelsberger, current CEO of CapitalStream, said, “We are delighted to join an organization such as HCL with its clearly differentiated strategy and focus on delivering value to the customer. 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 world-class business process and technology skills and global resources.”
