Date:09/05/2006 URL: http://www.thehindubusinessline.com/2006/05/09/stories/2006050900600400.htm

Back VSNL to buy Direct Internet for Rs 75 cr

Our Bureau

Deal to be through in a few weeks

Mumbai , May 8

Videsh Sanchar Nigam Ltd has agreed to buy Internet services provider, Direct Internet Services, and its wholly owned subsidiary, Primus Telecommunications India Ltd, for an enterprise valuation of Rs 75 crore.

The transaction will be completed in a few weeks' time, VSNL said in a statement to the stock exchanges on Monday.

Focus on SME segment

Company officials said the chief attraction of the acquiree company was its strong presence in the small and medium enterprise (SME) segment, an area of tremendous growth possibilities.

Direct Internet Services is 85 per cent owned by Primus Communications Inc, a US-based provider of international and domestic voice, data and Internet services. The remaining stake is owned by the promoters of Primus Communications Inc.

VSNL has signed a share purchase agreement for buying out these stakeholders in Direct Internet Services.

Primus Telecommunications India, headquartered in New Delhi, is a `category A' ISP; it provides fixed broadband wireless Internet services to SMEs (as well as some larger corporates) in several cities in India. Its services cover Delhi, Gurgaon, Noida, Mumbai, Chennai, Bangalore, Hyderabad, Kolkata, Pune, Chandigarh and Coimbatore.

VSNL has shown a considerable appetite for acquisitions in the last couple of years. It acquired undersea cable network, Tyco Global, and then followed it up with the acquisition of Teleglobe, an international voice, data and IP services provider.