India's Essar Group has agreed to buy a controlling stake in communications solution firm AGC Networks for $44.5 million, as it strives to boost outsourcing services.
Essar Group will pay 245 rupees ($5.30) a share for the 59.13 percent stake in AGC Networks, from U.S. network equipment maker Avaya Inc, and will offer to buy an additional 20 percent stake in AGC as required by Indian regulations.
The offer price is 12 percent lower than AGC's Friday closing price of 278.45 rupees in the Mumbai market.
Essar said the open offer for the additional 20 percent stake would cost 780 million rupees. Company officials on a conference call said the open offer would be announced in about three weeks.
"This transaction allows us to offer a wider range of services," Aparup Sengupta, global CEO of Essar Group's outsourcing venture Aegis Ltd, told journalists on Sunday.
AGC Networks is focused on the India and Australia markets and had annual revenue of about $100 million, Sengupta said. The company employs about 500 people.
Sengupta said there was no plan of merging unlisted Aegis Ltd with listed AGC Networks.
"We are under no pressure to list (Aegis)," he said.
Edelweiss Capital Ltd advised Essar on the transaction and is also the manager to the open offer.