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Rewind 2014: Five key deals in TMT sector

31 December, 2014

Technology, Media and Telecom (TMT) was one of the biggest drivers of private investment and M&A activity last year. While e-commerce and new generation tech ventures scooped up large sums from private investors, big M&A transactions in telecom, BPO and software services kept the inorganic growth counter ringing for companies.

Media sector was not without colour either. The bustling sector saw deals spread across broadcasting, multiplex (Carnival buying Big Cinemas and HDIL’s multiplex business; Inox buying Satyam and Cinepolis snapping Fun Cinemas) and cable business. With Videocon D2H filing its documents for an IPO, the country would soon see yet another DTH service provider (behind Dish TV) to enter the public domain.

The most significant transaction in the media space, however, was the eventual takeover of Network18 by Reliance Industries. Reliance had bankrolled a large acquisition of Eenadu’s ETV business by Network18 three years ago through convertibles and it went on to convert the securities into shares thereby gaining control of one of the top broadcasters in the country. The deal also led to new strategic calls with a decision by the group not to float HomeShop18 on NYSE, as previously proposed.

Here’s a quick flashback of top deals in the TMT sector.

Flipkart raised over $1.9B in three rounds

Flipkart.com, India’s largest e-commerce platform, raised a $1.91 billion in three rounds through the year. At first, the e-com firm raised $210 million led by DST Global, a global investment firm focusing on internet, in May. Existing investors Tiger Global, Naspers, and Iconiq Capital also participated in this round. After a couple of months, the firm raised a record $1 billion in a fresh funding round co-led by two of its existing investors Tiger Global and Naspers. Singapore’s sovereign fund GIC, along with other existing investors Accel Partners, DST Global, ICONIQ Capital, Morgan Stanley Investment Management and Sofina, also participated in this financing round. It ended the year with a bang raising $700 million more from a slew of investors, including UK-based investment management firm Baillie Gifford, US-based VC fund Greenoaks Capital, Steadview Capital, T Rowe Price Associates, and Qatar Investment Authority. The round also saw participation from existing investors DST Global, GIC, Iconiq Capital, and Tiger Global. Flipkart had sealed one large deal snapping Myntra and with all the money it has garnered it is poised to strike more acquisitions in the coming year, as it takes on the might of Amazon and also fights local rival Snapdeal.

Bharti Airtel selling 4,800 telecom towers in Africa to American Tower Cop

Bharti Airtel inked four deals this year to divest telecom tower assets in African continent. In total it sealed deals to offload around 12,500 towers out of its 15,000 towers in the continent. The transactions allow the telco to sell and leaseback the assets thereby focusing on its core business while generating cash to cut debt levels. Although the transaction values of all the deals were not disclosed, the single largest of these comprising sale of over 4,800 towers in Nigeria to American Tower Corp was pegged at $1.05 billion alone. By this benchmark Bharti Airtel is estimated to have sealed deals worth well over $2.5 billion. The other deals involved sale of 3,100 towers in four countries in Africa to Helios Towers Africa (HTA), a firm owned by a consortium of investors including Africa-focused PE firm Helios Investment Partners and International Finance Corporation (IFC). It also sold over 3,500 telecom towers spread across six African countries to Eaton Towers, an independent telecom tower company in Africa. Early this month it sold 1,100 towers in Zambia and Rwanda to Nigeria-based telecommunications infrastructure group IHS Holding Limited. Bharti Airtel has operations in 20 countries in Africa after snapping the assets of Kuwait’s Zain in the continent for $9 billion in 2010.

Snapdeal raised close to $1 billion in four rounds

Snapdeal became the second Indian internet firm to cross funding milestone of raising around $1 billion or more throughout the year. In the latest and largest round it raised $627 million from Japanese telecom and internet firm SoftBank Corp besides existing investors Kalaari Capital and Nexus Venture Partners pitching in with around $65 million more. This was the second biggest fundraising round by an Indian e-com firm, after Flipkart’s record $1 billion funding round early this year. Post this, SoftBank became the majority stake holder in Snapdeal. The e-com firm raised $134 million in previous round led by existing investor eBay Inc and participation of other existing backers like Kalaari Capital, Nexus Venture Partners and Bessemer Venture Partners. Intel Capital and Saama Capital also participated in this round. It also raised $100 million from US-based BlackRock Financial Management, Singapore’s state investment firm Temasek, Hong Kong-based Myriad Asset Management and Tybourne Capital Management, besides PremjiInvest, the personal investment vehicle of Wipro chairman Azim Premji. It also raised small sum from Ratan Tata, former chief of Tata Group.

Aegis sells BPO units in US

Essar Group’s privately held business process outsourcing (BPO) business Aegis Ltd inked a deal to sell its operations in the US, Philippines and Costa Rica to French company Teleperformance for $610 million. The business represented total annual revenue of $400 million and more than 19,000 full time employees across 16 centres in the three countries, serving multiple premium clients in various key growing industries in the US market. Aegis, however, retained the remainder of the BPO business globally across India, Sri Lanka, Malaysia, Australia, South Africa, Peru, Argentina, Saudi Arabia and the UK.

TCS to merge CMC with itself

India’s largest software services provider Tata Consultancy Services Ltd has set in motion a plan to merge its public listed subsidiary CMC Ltd with itself in a deal worth around $500 million. Incorporated in 1975 as a state-run IT services firm, CMC was acquired by TCS in 2001. Currently, TCS owns 51.12 per cent equity stake in CMC. CMC in engaged in design, development and implementation of software technologies and applications, providing professional services in India and overseas, and procurement, installation, commissioning, warranty and maintenance of imported and indigenous computer and networking systems, and in education training.


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Rewind 2014: Five key deals in TMT sector

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