Sterlite Technologies has acquired Elitecore Technologies, a telecom software product company, for an overall enterprise value of about Rs 180 crore in an all-cash deal.

Elitecore is a provider of Operations Support Services, Business Support Services and is majority owned by First Carlyle Ventures Mauritius. The company was set up in 1999 by software technocrats with over 20 years of experience.

“The transaction follows our strategy to undertake attractive M&A opportunities in the entire telecom value chain. The acquisition is a lever for Sterlite to create new inflections in the telecom arena that are in line with Sterlite’s long-term goals of being an integrated telecom solution provider,” said Pravin Agarwal, Vice-Chairman, Sterlite Technologies.

The transaction is expected to be value accretive by FY17 and is expected to be closed shortly subject to completion of certain regulatory and statutory formalities, the company said in a statement.

Upon completion of the transaction, Elitecore Technologies is proposed to be merged into Sterlite Technologies, it added.

“We are buying out 100 per cent stake in the company,” Anand Agarwal, CEO of Sterlite, said, adding that the acquisition is its first in the telecom software space.

Established in 1999 by a group of technocrats, over the last few years, Elitecore has made significant inroads in both Indian and global telecom operators and has expanded its geographic footprint to include South East Asia, West Asia & Africa and lately Eastern Europe and Latin America.

Focus on high-value products Sterlite, which has expanded its capability to make optical fibre, has taken a decision to capitalise on the broadband data network creation globally by offering a larger range of products and solutions especially focusing on the high-value product segments.

“Elitecore provides software to manage networks and billing support at the customer end. This is complementary to what we were doing,” Agarwal explained, adding the acquisition will help scale up the business and improve Sterlite’s current EBITDA margins of 17-18 per cent from the telecom business.

Sterlite was advised by Cyril Amarchand Mangaldas on legal matters, PwC on financial diligence, EY on taxation matters and KPMG on transaction structuring matters. Carlyle and Elitecore Technologies were advised by NRS Advisors and Systematix Capital on transaction structuring, J Sagar Associates on legal matters and KPMG on taxation matters.

Related Topics
comment COMMENT NOW