UK virtual network operator (VNO), Vanco has been sold off to Indian telco, Reliance Communications in a $77-million (38.9-million) deal.
Reliance, which made the acquisition through its subsidiary Reliance Globalcom, responsible for the Flag undersea cable system, said the acquisition of Vanco would add 185 million to Globalcom's annual revenue through secure long-term contracts with large enterprise customers, such as Capespan, Kelly Services and Virgin Retail.
"The acquisition of Vanco is in line with Reliance Globalcom's vision to create one of the top five global data communications enterprises in the world," said Reliance Communications chairman, Anil Dhirubhai Ambani.
Vanco operates in 40,000 locations across 163 countries, though 90 per cent of its revenue comes from the US, UK, Germany, and France - markets that must've seemed very attractive to the Indian buyer as it looks to expand its global presence.
But the acquisition also gives some reassurance to Vanco customers, as the VNO suspended trading in it shares earlier this month, after issuing a profit warning and parting company with its founding chief executive, Allen Timpany.
It shares lost almost 66 per cent of their value over the last six months of this year and were valued at 64.5 pence per share when their trading was suspended on 9 May. Its share price peaked at five pounds in September 2006.
"Temporary fluctuations" in its balance sheet and market conditions had led it into negotiating a 23.3 million extension of its revolving credit facility with its banks on 1 April, making 123.3 million available until 2012.
But it subsequently said it was likely to defer the publication of its year-end 31 January 2008 financial results when it suspended trading in its shares. At that time, it stated that its profitability was under review and "may be the subject of revision".
Timpany bought Vanco for one pound in 1988 and set out to use the infrastructure of other telcos to provide global voice and data service coverage. He still owns 46 per cent of Vanco shares, but was not available for comment.
Reliance said Vanco's incumbent management team, led by Mark Thompson and Wayne Churchill, would remain in place to lead enterprise customer management strategy at Globalcom.
Reliance Communications also announced earlier on Monday that it had entered into negotiations with MTN Group in South Africa to combine their businesses.
And last year, Reliance Globalcom acquired Yipes Holdings, a US-based Ethernet service provider, for $300 million (151.3 million).
