Satyam Info acquires Net portal IndiaWorld

BANGALORE: Satyam Infoway Ltd. has agreed to acquire IndiaWorld Communications Pvt. Ltd., the portal company for Rs 499 crore, which is claimed to be the first ever acquisition of an Internet business in the country in an all-cash deal.

In the two-phase acquisition deal, Satyam Infoway will acquire 24.5 per cent of IndiaWorld for Rs 122 crore and the other 75.5 per cent before September 30, 2000 for Rs 376.5 crore. IndiaWorld has a capital of Rs 20 lakh, where a share of Rs 10 has been valued at about Rs 25,000.

To get the option to acquire the remaining 75.5 per cent stake in the company, Satyam has placed a non-refundable deposit of Rs 51.3 crore, where Ernst & Young has provided a "certificate of fairness of valuation for the transaction''. With this acquisition, Satyam Infoway claims that it will have the largest portal in India where it already has satyamonline.com, walletwatch.com, carstreet.com and carnaticmusic.com. While the first phase of acquisition will be funded out of the proceeds of its recent 41.75 lakh American Depository Shares (ADS) issue for $ 75 millions, the second phase acquisition funding is yet to be finalized.