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INDIA
BUSINESS WORLD -
OCTOBER 2005
THE MONTH THAT WAS
SILICON VALLEY
BIG WHEEL BUYS SIFY FOR $100M
The man who sold
his company ServerWorks to Broadcom in 2001 for $1.8 billion
has now entered the Indian internet arena. Silicon Valley
entrepreneur Raju Vegesna is acquiring Satyam Computers 31.61%
stake in internet and network service provider Sify for $62.6
m. Another preferential issue of Sify's stock is being made
to Vegesna for $37.5 m, taking his total share in the company
to 40%. The total size of the deal is $100 m. Satyam Computer's
31.61% stake in Sify is being acquired for $5.60 per share
in cash by Infinity Capital Ventures, a company controlled
by Mr Vegesna.
In a separate transaction,
Infinity Capital also agreed to purchase directly from Sify
approximately 6.7 m newly-issued shares at a purchase price
of Rs 256.09 (about $5.60) per share in cash Sify, representing
an additional investment of Rs 172.1 crore (about $37 m).
The second transaction is expected to be completed in late
2005 after stockholder and regulatory approvals. The sale
of the Satyam shares has been completed and is not contingent
on the Sify issuance. Commenting on the acquisition of Satyam's
shares in Sify, Mr Vegesna said, "Sify has done very
well to innovate and grow its businesses in the Internet and
network services in India. The company represents the right
fit in terms of market opportunity, innovation and leadership
in this fast growing market.''
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