RCom buys US-based Yipes for $300mn -Video

RCom buys US-based Yipes for $300mn -Video

BS Reporter / Mumbai July 16, 2007

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In its biggest acquisition deal so far, Reliance Communications (RCom)  has acquired US data communications company Yipes Holdings for $300 million (Rs 1,200 crore) in an all-cash deal.

The company was acquired from venture capital firms Norwest Venture Partners, controlled by Promod Haque, Crosslink Capital and Sprout Group, and private equity firm JP Morgan Partners.

Promod Haque, Yipes chairman and Norwest Venture Partners managing director, will continue on the company's board, which has been acquired by and will function as a subsidiary of Flag Telecom, the submarine cable company RCom acquired in 2003 for $207 million.

The acquisition will help the Indian telecom services provider to penetrate the $100-billion global enterprise and the institutional data market. Yipes enjoys 40% of the US data communication market.

By synergising operations with Flag Telecom, RCom Chairman Anil Ambani aims to become a global leader in the ethernet-based data communications market. Ethernet is the latest and most popular technology for data communications.

Yipes is headquartered in San Francisco and owns over 22,000 route kilometres of fibre optic across 14 US cities, and also has a presence in London, Hong Kong and Tokyo.

Flag and Yipes will work jointly to address markets in which RCom has a presence, like India, West Asia and other Asian regions.

Announcing the acquisition here today, Ambani said: