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| Essar closes acquisition of AGC, board reconstituted |
| BS Reporter / Mumbai Sep 02, 2010, 00:44 IST |
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Essar Group today completed the acquisition of AGC Networks, including closure of the open offer representing 20 per cent of AGC Networks’ outstanding shares. The total deal size was $61.4 million (Rs 288 crore), taking Essar’s stake in the company to 79.13 per cent. The company will continue to work independently.
In May, Essar said it would acquire US-based Avaya’s entire 59.13 per cent stake in the publicly listed AGC Networks, a company in the area of communications solutions, for $44.5 million (Rs 205 crore) or Rs 245 a share. It had also announced an open offer to acquire an additional 20 per cent stake. The acquisition was done through Essar Capital Finance (ECF).
“We have completed the acquisition today and now we will focus on taking the company global. Avaya has completely exited the firm. AGC Networks has good cash flow and we plan to use this for the expansion of the company,” said Aparup Sengupta, managing director and global CEO of Essar’s IT and BPO division.
He said AGC’d continue to be listed on both the Bombay Stock Exchange and the National Stock Exchange and continue with the same brand.
AGC’s board has been reconstituted, with Ayaya’s representatives stepping down and S K Jha taking charge as managing director, with Anil Nair as joint MD. Anhuman Ruia, promoter-director from Essar, Sengupta, and Jha will join the board.
While AGC is seen as an Avaya shop, about 40 per cent of its revenue comes from systems integration (SI) work. This gives Aegis, part of the Essar Group, a footprint in the SI segment, with about 1,000 customers and presence in several countries. “Our plans are already on. A team within Aegis is working with AGC to see how we can cross-sell their services to our existing customer base. More important, we will take AGC to other international geographies,” said Sengupta.
AGC Networks has presence in India and Australia will expand its footprints to regions like the US, West Asia, Latin America, and Philippines.
The company’s stock closed at Rs 236, up 0.98 per cent. The stock during the session hit an intra-day high of Rs 249, up 6.5 per cent from the previous close of Rs 233.7.
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