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CorporateM&A

Bharti Airtel Acquires Telenor India, Deal Closes In 12 Months

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Big news of this morning. Bharti Airtel today said it is going to acquire Telenor India, the Indian telecom arm of Telenor. Both the firms have signed an agreement in this regard. The acquisition is subject to requisite regulatory approvals.

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As part of the agreement, Airtel will acquire Telenor India’s running operations in seven circles – Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. These circles represent a high population concentration and therefore offer a high potential for growth.

The proposed acquisition will include transfer of all of Telenor India’s assets and customers, further augmenting Airtel’s overall customer base and network. It will also enable Airtel to further bolster its strong spectrum foot-print in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band. Airtel will ensure quality services to Telenor India’s customers, while offering them the added benefits of its innovative product portfolio, access to superior voice & data services, mobile banking, VAS and domestic/ international roaming facilities. Telenor India’s operations and services will continue as normal until the completion of the transaction.

“The agreement underlines our commitment to lead India’s digital revolution by offering world-class and affordable telecom services through a robust spectrum portfolio spread across multiple bands. On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position in several key circles. The customers of Telenor India will now be able to enjoy India’s widest and fastest voice & data network, and a range of Airtel’s world-class products and services,” said Gopal Vittal, Managing Director and CEO (India and South Asia), Bharti Airtel.

“The acquisition of additional spectrum through this transaction, which made an attractive business proposition, has further enhanced our already solid spectrum portfolio. The proposed transaction will also create substantial long term value for our shareholders given the significant synergies.” added Gopal.

Sigve Brekke, Chief Executive Officer of Telenor Group, said, “We believe today’s agreement is in the best interest of our customers, employees and Telenor Group. Finding a long term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel. The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India’s future business on a standalone basis will not give an acceptable level of return.”

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CorporateM&A

Airtel Acquires Small Ticket Money Lending Firm Seynse

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Bharti Airtel today acquired a fintech firm named Seynse Technologies Pvt. Ltd. The acquisition was done through Bharti Airtel’s subsidiary Bharti Airtel Services. Whether it is a complete takeover or a majority equity acquisition is not known.

Seynse (pronounced ‘Sense’), through its financial product called Loan Singh, offers small ticket loans to needy individuals. Seynse has built a proprietary credit engine and advanced machine learning capacity to serve customers.  The company claims it offers loans to creditworthy yet unserved borrowers.

The fintech company is registered in Goa with an authorised capital of Rs 30 lakh and paid up capital of Rs 2 lakh 34 thousand.

“Over the years, Airtel has developed strong in-house data science capabilities that enable us to serve our customers better. Seynse’s advanced credit scoring algorithms based on multiple sources and digital analytics will add immense value to our innovation factory. We look forward to working with the passionate team of professionals at Seynse to bring targeted products and solutions to our 270 million plus customers,” said Harmeen Mehta, Global CIO and Director – Engineering, Bharti Airtel.

Gourav Jaswal, Director, Seynse added “We’re privileged to have Airtel as a partner in our growth journey and look forward to gaining from their deep understanding of the Indian customer. This partnership will give Seynse the opportunity to innovate for a much wider audience and add to its product portfolio.”

The company has 41 employees and its revenue for FY 2016 was Rs 6,53,203.

 

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M&A

Capgemini Acquires TCube Solutions, Idean In Two Separate Deals

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Outsourcing and consulting firm Capgimini has announced two acquisitions on Thursday. It has acquired Bhubaneshwar, India based TCube Solutions, an IT solutions firm specialising in insurance and financial services.

This acquisition, Capgimini says, will help the consulting firm strengthen its positions in the insurance and financial services sector, particularly in north America.

No finance details about the acquisition or transaction was publicly shared by the firm.

“TCube Solutions prides itself on its deep domain expertise and the longevity of our customer relationships,” said Sam McGuckin, President and CEO of TCube Solutions, who joins Capgemini. “Our joining Capgemini will enable its broader customer base to benefit from our established solutions and services, as well as provide TCube’s current customers the means to plan their transformational futures.”

TCube Solutions specializes in Property and Casualty (P&C) insurance software and services. Its offerings include integrated policy management, billing, claims operations, reinsurance management systems and data strategy capabilities. It is the largest independent service provider specializing in Duck Creek Technologies.

“We have worked hard to build a strong team with key skills and expertise that are in great demand in today’s fast moving insurance market,” explains Sabyasachi Patnaik, Delivery Lead, TCube Solutions, who joins Capgemini. “As part of Capgemini we are looking forward to helping a much wider base of clients build more agile insurance services to enhance their customer experiences.”

In a similar development, Capgemini has acquired Palo Alto, US based digital design firm Idean. The transactions details are, however, not known.

Acquisition of Idean, Capgemini says, will reinforce the Group’s user-centered and digital-first experience design and strategy services, particularly in North America, and extend its network of Digital studios; helping to meet growing customer demand for the Group’s end to end digital services.

“Idean’s Scandinavian design ethos and Silicon Valley mindset are a perfect fit to further enhance Capgemini’s progressive digital customer experience offerings,” said Capgemini CEO Hermmelin.

 

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CorporateResults

Jio Effect : Idea Cellular Revenue Drops To Unforeseen Level

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Idea Cellular today announced its financial results for Q3 and what we witnessed today has not happened in the last 10 years for the Aditya Birla Group run operator. Even in its own terms, Idea Cellular admits the company’s revenue has dropped to an unforeseen level.

The company posted revenues of Rs 8663 crore in Q3 2017 compared to Rs 9300 crore in the previous quarter showing a dip of 6.9% sequentially. This dip was seen across it operating circles.

More shocking is, Idea posted a loss of Rs 386 crore in this quarter compared to a profit of Rs 90 crore in Q2. On a standalone basis too, the firm posted loss of Rs 479 crore compared to a profit of Rs 4 crore. This had never happened since 2007 when the company went public.

The company attributed this negative development to Reliance Jio, of course without exclusively naming it but referring it to as a new operator.

“The Indian mobile industry witnessed an unprecedented disruption in the quarter of October to December 2016, primarily due to free voice & mobile data promotions by the new entrant in the sector,” Idea said in a statement.

“Consequently, revenue KPIs and financial parameters for all mobile operators have sharply declined, and for the first time in its history the flourishing Indian wireless sector is trending towards an annual revenue decline of 3 to 5% in FY2017 (vs FY16). The sector can expect to recover revenues only once the new operator starts charging for its pan India mobile services.”

Idea Cellular said because of this new operator and the difficult trends in the industry it was forced to reduce voice rates by 10.6% per minute and mobile data rates by 15.2% per megabyte. The company also said that because of the free offering, both on voice and data, Idea lost 5.5 million mobile data users during this period.

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M&A

Sachin Backed Smartron Invests In Electric Bike Maker Volta Motors

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Smartron, an Indian technology company backed by ace cricketer Sachin Tendulkar, has invested in electric bike startup Volta Motors. Though the amount of money invested is not known nor the equity, it is believed that Smartron now must have majority stake in Volta Motors as it will be called as Tron Motors, a Smartron Company.

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The Chennai based Smartron has so far launched two products in the market- a smartphone named tPhone and a laptop named tBook. Cricket legend Sachin Tendulkar has invested in the company who prefers to be called as an Indian IoT company.

“This also marks a collaboration of two start-ups with the same ideals and aspirations of building an Indian brand in the global product market place,” the company said today.

Volta Motors has so far designed and developed India’s first cross-over electric bike ‘VOLTA ZAP’. Under the aegis of this new company the team will accelerate the development, manufacturing and commercialisation of these vehicles. The company also intends to bring out a range of IoT enabled electric vehicles that will be designed, engineered, and manufactured in India for India and the world. It will also redefine the lifestyle segment of mobility by being sustainable and promote healthy living.

“Our association with Volta illustrates the strategy that Smartron has pursued from its inception that we need to be known as company that is building a strong product ecosystem across IoT verticals from personal to health to home to energy to farming. Electric eco-friendly bikes powered by an IoT platform like Smartron’s TRONX will be an essential part of our range of smart products”.

“We are excited to be a part of Smartron’s journey. We share similar synergies of bringing in smart and innovative products that are aligned to create an Indian brand that is recognised globally. With the creation of Tron Motors we hope to expand our ecosystem under the theme of being environmentally friendly as well as high on style quotient,” said Anoop Nishanth, CEO, Volta Motors.

This strategic investment is a part of Smartron’s approach to build broader product ecosystem under its innovative and unique AI powered tronx IoT platform. Smartron is extending its unique tronx platform across range of verticals starting from smart home, personalized health, smart energy, intelligent vehicles, smart farming and infrastructure, to bring-in next generation of smart devices, sensors, services and care to consumer, enterprise, industrial and infrastructure markets.

This partnership would provide the strength and momentum to develop and expand Smartron’s significant IoT enabled portfolio to address substantial opportunities in India and abroad markets, the company added.

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M&A

Vodafone Confirms Merger Talks With Idea Cellular

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This could be the biggest development in the Indian telecom industry for 2017. Country’s second largest operator Vodafone India today confirmed having discussions with Idea Cellular, the third largest operator, for a possible merger. The Vodafone-Idea merger speculation was doing the rounds for over a month now.

“Vodafone confirms that it is in discussions with the Aditya Birla Group about an all share merger of Vodafone India and Idea,” the company with the British origin said in a statement. However, the 42% stake it has in Indus Towers is excluded from this discussion.

Speculations regarding a possible merger of these two big telecom firms is going on for a month now with financial institutions advising both the firms reportedly confirming about it.

Though Vodafone has confirmed it, details about a possible merger is not yet clear and also the kind of transaction it will involve is not yet ascertained. However, Vodafone has said it will involve share transfer between the two firms.

“Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating Vodafone India,” the statement added.

Typical to any speculative M&A statement Vodafone said that ‘there is no certainty that any transaction will be agreed, nor as to the terms or timing of any transaction.’

This Vodafone-Idea merger, two of country’s largest operators, is a direct fallout of Reliance Jio’s entry to the telecom domain that has impacted the bottomline of all three big incumbent operators – Bharti Airtel, Vodafone India and Idea Cellular.

The ferocity of Jio’s impact can be measured from the Airtel’s Q3 results that were announced last week where the company’s net profit plunged to more than 55% and it is expected that the Q4 would be worse. Similarly, Idea Cellular halted its result announcement and postponed a board meeting last week anticipating a net loss of around Rs 500 crore for Q3 – a first for the company.

If the Vodafone-Idea merger happens it will change the dynamics of the Indian telecocm industry and will change the pecking order.

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M&A

Wipro Acquires Brazilian Tech Firm InfoServer For $9 Mn

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India’s Wipro on Wednesday announced that it is going to acquire InfoServer, a Brazil based firm providing software solutions for the BFSI segment, for $8.7 million or 27.6 million in Brazilian currency.

InfoSERVER provides custom application development and software deployment services to banking, financial services and insurance firms, primarily in the Brazilian market. It is a 21 year old company and boasts of some of the largest banks of the country as its clients.

This acquisition, the company said, will help the company making bigger strides in the LATAM (Latin American) markets. The Indian company said the acquisition closely aligns with its vision to localise, expand its presence and become a significant partner of choice in the LATAM market. It also makes the Azim Premji founded Indian software firm an end-to-end IT services provider that brings global expertise while operating as a local company. Wipro has a significant presence in Latin America with offices across 5 countries in the region – Argentina, Brazil, Chile, Colombia and Mexico.

“We welcome InfoSERVER to the family. The LATAM market and Brazil in particular is a strategic growth and investment region for Wipro. This acquisition will provide Wipro with scale and key client relationships, especially in the banking, financial services and insurance domains, which are the largest and fastest growing sectors in the region,” said Ankur Prakash, Vice President and Head of New Growth and Emerging Markets, Wipro Limited.

Welcoming the acquisition, Fabiano Funari, Vice President and Head of Sales & Operations, InfoSERVER S.A. said, “We are excited about what Wipro and InfoSERVER can accomplish together for our customers and employees. Wipro and InfoSERVER will combine strong local domain knowledge with technological breadth and global experience to help clients achieve their desired outcomes. Wipro’s global client base, delivery expertise and scale will help us expand our reach and offerings.”

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M&A

Cisco Acquires AppDynamics For $3.7 Bn

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Cisco today announced to acquire San Francisco based software firm AppDynamics for $3.7 billion. AppDynamics is an application intelligence firm and develop solutions like cloud application and business monitoring platform to help companies to improve application and business performance.

The financial transactions involves cash and assumed equity transfers.

Post acquisition AppDynamics will continue to be a led by its CEO David Wadhwani and it will be integrated in the company as a new software business unit in Cisco’s IoT and Applications business unit. The acquisition is expected to close in Cisco’s third quarter of fiscal year 2017, subject to customary closing conditions.

“Applications have become the lifeblood of a company’s success. Keeping those apps running and performing well has never been more important. Unfortunately, that job has only gotten harder, as IT departments and developers struggle with a tangled web of disconnected, complex data that’s hard to understand,” said Rowan Trollope, Cisco senior vice president and general manager of Cisco’s Internet of Things and Applications Business Group.

“The combination of Cisco and AppDynamics will allow us to provide end to end visibility and intelligence from the network through to the application; which, combined with security and scale, and help IT to drive a new level of business results,” he added.

“AppDynamics is empowering companies to build and successfully run the applications they need to compete in today’s digital world,” said David Wadhwani, AppDynamics CEO and president. “With digital transformation, companies must re-define their relationships with customers through software. We’re excited to join Cisco, as it will enable us to help more companies around the globe.”

In this digital economy, the application is the business and applications drive business outcomes. But as things get simpler for consumers, they get more complex for companies trying to stay ahead of rising customer expectations. Together AppDynamics and Cisco will provide customers with intelligent and actionable insights, helping them make speedy business decisions and improve business performance.

 

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CorporateResults

Airtel Q3 Results: Net Profit Tanks To 54%, Revenue Flat

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The Airtel Q3 2017 results is a clear sign how predatory pricing can bleed the industry. The company’s net income plunged to a new low – 54.5%. The company posted a net profit of Rs 503 crore in Q3, 2017 compared to Rs 1108 crore for the same period a year ago.

If we make a quarter on quarter comparison, the Airtel Q3 shows even more troubled picture – a drop of 65.5% compared to the previous quarter. In Q2 2017, company’s net profit was Rs 1460 crore.

“The quarter has seen turbulence due to the continued predatory pricing by a new operator,” said Airtel India & South Asia CEO Gopal Vittal. “This has led to an unprecedented year on year revenue decline for the industry, pressure on margins and a serious impact on the financial health of the sector.”

Revenues for Airtel India in the Q3 2017 rose marginally to post Rs 18013 crore, an increment of 1.8% over Rs 17694 crore posted in the same period previous year. The company said the slowdown in mobile revenue growth
primarily due to free voice and data offering by a new operator.

Airtel was obviously referring at Reliance Jio without directly naming the new operator.

The consolidated revenue of Bharti Airtel, that includes businesses in India, South Asia and Africa has also dropped 3% to post Rs 23336 crore in Q3 2017 compared to Rs 24,066 in Q3 2016.

Airtel Q3 results also shows data consumption has gone up for the operator however, the mobile data ARPU has decreased during the quarter from Rs 200 in Q3 2016 to Rs 175 in this quarter. Data revenue, during this quarter, represented 22.8% of its total revenue showing a dip from the same period a year ago. In Q3, 2016 it contributed 23.1% to the total revenue.

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M&A

Liquid Web Acquires Hosting Provider WiredTree

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Managed hosting provider Liquid Web Thursday acquired Chicago-based managed web hosting company, WiredTree. The company, however, has not disclosed the details of the transaction. In August last year Liquid Web had acquired Rackspace’s Cloud Sites business unit.

While most of the largest hosting and cloud providers are either focused on very small website hosting or infrastructure services for very large enterprises, Liquid Web focuses its managed hosting products and high-touch support on tech-savvy, web-reliant professionals. These professionals rely heavily on the web and cloud to grow their businesses or to power multiple websites and applications. They need a reliable, secure partner who is building products for them and guaranteeing 100 percent power and uptime. Liquid Web is that partner.

“With the addition of both WiredTree and Cloud Sites, we further our mission to empower web professionals worldwide to create content and commerce without worry,” said Liquid Web CEO Jim Geiger. “For web professionals whose websites fuel their businesses, we understand they need a partner to provide both a technological advantage and support, with a broad portfolio of products and a whatever-it-takes attitude. We’re purposefully building a smart, easy, flexible experience that does just that – on our fully owned infrastructure, which is backed by the most helpful humans in hosting.”

The company said for WiredTree’s customers, the acquisition means better infrastructure, no change in pricing and superior support with access to Liquid Web’s 250 Red Hat, Linux and Windows-certified technicians who are available 24x7x365 by phone, email or chat. In order to ensure a seamless and hassle-free transition, Liquid Web has created a specialized migration team to work directly with customers as their scheduled upgrades occur.

“As their managed hosting provider, we want our newest customers to know that we are willing to go above and beyond to help them succeed,” said Geiger. “We look forward to creating an exceptional business partnership and would like to welcome each WiredTree customer to the Liquid Web family.”

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