Click to play videoNew Delhi: Anil Ambani-owned Reliance Communication's subsidiary, Flag has acquired a US-based major called Yipes Holdings.
The all cash deal is worth $300 million. Yipes is the US provider of managed Ethernet and application delivery. With an operating margin of 55 per cent, Yipes' customers include Verizon and NTT.
The MD of Reliance Communication, Anil Ambani, says Yipes will provide them with the footprint they need in the US market.
"This is the largest acquisition that Reliance Communications has ever made. Yipes has 22,000 km of optic fibre network, has operating margin of 55 per cent and is cash positive," he said.
Reliance would be acquiring 100 per cent stake in the San Francisco-based firm through its affiliate Flag Telecom. Yipes will operate as a strategic business unit of Flag, which provides international network transport and data services to telecom operators, content providers and Internet communities across the globe.
Ambani said RCOM would spend Rs 1,000 crore to roll out Yipes' services in Asia, Africa Middle-East and Europe in the next one year. Yipes' customers include Verizon and NTT.
He also said Pramod Haque, managing partner of Norwest Venture Partners, would be joining the company.
RCOM also sees a four to five per cent increase in revenues of Yipes over the next four to five years.
Reliance Communications President (Global Business) Punit Garg was quoted by PTI as saying that the acquisition would place the Indian firm among the top three global Ethernet service providers in the world.
"We plan to leverage the significant head start of Yipes in Ethernet services, double the coverage in the US market and roll out Yipes services over the Flag network. We are fully committed to bringing Ethernet services to nearly 40 new countries," Garg was further quoted as saying.
(For updates you can share with your friends, follow IBNLive on Facebook, Twitter and Google+)
displayed with permission. Use of the CNN name and/or logo on or as part of CNN-IBN does not derogate from the intellectual property rights of Cable News Network in respect of them.