Sify Ltd and Satyam Computer Services on Thursday announced the acquisition of Satyam’s 31.6 per cent stake in Sify by Infinity Capital Ventures, LP.
The new investor, a company controlled by Silicon Valley entrepreneur Raju Vegesna, has also agreed to purchase from Sify approximately 6.7 million newly-issued shares, taking its stake in the Internet, network and e-commerce services company to 40 per cent. The direct purchase is expected to close by late 2005 post stockholder and regulatory approvals.
On the acquisition of Satyam’s shares in Sify, Vegesna said, “The company represents the right fit in terms of market opportunity, innovation and leadership in this fast growing market, and I am excited at the prospect of helping Sify realise its great potential by building upon its market-leading iWay cyber café and Enterprise Solutions business segments while further exploiting Sify’s expertise in Internet and network technologies.”
Infinity Capital’s purchase of Satyam’s 31.6 per cent stake is at $62.6 million, and the direct purchase from Sify is expected to infuse capital to the tune of $37 million.
B Ramalinga Raju, Chairman of Satyam Computer Services Ltd, said, “The move would enable Satyam to further focus on its core business and unlock the value of its investment.” As against its original investment of $5 million in Sify, Satyam has received a total consideration of about $117 million till date.
Sify will appoint Vegesna as Chairman, and an additional person designated by him to its board of directors. It will continue to focus on the three broad areas of consumer services, including portals and Internet access, corporate services, and international IT infrastructure management services.
The company will look at investing to enhance its capability in the portals space, in network expansion and quality of service delivery, innovative service products and acquisitions for growth, it said in a release.