Indiainfo.com yesterday announced it would merge with India Abroad Publications Inc, the oldest Indian newspaper in North America, and the largest outside of India. The merger will be concurrent to Indiainfo.com's initial public offering.
The deal is a part-stock, part-cash arrangement following which Gopal Raju, founder-chairman of the India Abroad group, who owns 95 per cent of India Abroad Publications will get a significant stake in Indiainfo.com Pvt Ltd.
India Abroad will function as a subsidiary of Indiainfo.com and will be retained as a brand in foreign countries. Indiainfo.com will brand and promote its international edition as Indiaabroad.com.
Indiainfo had in the first week of April denied reports about the proposed acquisition of India Abroad.
Indiainfo chairman Raj Koneru, however, declined to reveal the size of the deal and the way it had been structured.
Indiainfo.com will gain access to India Abroad's huge content repository of news and events as well as content generated by its business affiliate the New Delhi-based India Abroad News Service. IA Publications has editions in New York Tri-State (New York/New Jersey/Connecticut), New York East Coast, Chicago, Dallas, Los Angeles and Toronto.
The revenues of Indiainfo.com including that of the India Abroad group for the year ending March 2000 are around $12 to 13 million.
Indiainfo plans an IPO to raise funds for working capital, and creating infrastructure. However, Koneru did not disclose where the company would do its IPO.
The company recently concluded another acquisition of musicurry.com a web radio site and also offered 30 per cent of its stake to VSNL in exchange for being the default login page for all VSNL subscribers.
Morgan Stanley had earlier picked up some 7 per cent in the company which has been diluted following the VSNL and Musiscurry deals.
At the time of Morgan picking up equity in the company, it was valued at $150 million.
