Siffy inks $8.1 m stock deal to acquire IndiaPlaza.com

By Our Special Correspondent

CHENNAI, JULY 25. The Internet service provider Satyam Infoway Ltd. (Siffy in Nasdaq parlance) will acquire IndiaPlaza.com Inc. of the U.S. in a stock-all deal.

IndiaPlaza.com, a worldwide India-interest online shopping mall, owns and operates online shopping malls in the U.K., the U.S. and India. It is claimed to be popular with non-resident Indians.Satyam Infoway is expected to issue 4.80 lakh American depository shares (ADSs) to the owners of IndiaPlaza.com. The deal is valued at $8.1 million. This is based on the ADS price of Sify at Nasdaq on July 24.

IndiaPlaza has reported a revenue of $50,000 for the quarter ended June 2000. Under the terms of the deal, the team that created and operated IndiaPlaza will continue to work for Siffy. The deal is expected to be rounded within a month.

A start-up venture, the unlisted IndiaPlaza is just under two years old and is promoted by Mr. Vijay Shah and his ilk. They were running a grocery business in California before venturing to float IndiaPlaza. According to Mr. George Zacharias, president and chief operating officer of Sify, IndiaPlaza has built up a good network of vendors and suppliers. The acquisition, he felt, would go a long way in beefing up Siffy's e-commerce revenue opportunities. Mr. Zacharias said Mr. Shah would continue to head IndiaPlaza. Nevertheless, Sify would provide the necessary inputs - both financial and otherwise - to make the IndiaPlaza web site sophisticated and give it a personal touch.

On July 3, Sify rounded off its $115 million takeover deal with the owners of IndiaWorld Communications Pvt. Ltd. by modifying the payment mechanism. Consequently, from a cash-all deal, it turned out to be a cash-cum-stock deal.

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