France Tele buys GTL’s IT business
Orange Business Services, part of France Telecom, has bought the enterprise and managed services business of network service provider GTL Ltd.
As part of a restructuring, GTL put its infotech and enabled services division on the block as it wanted to focus on network services for telecom carriers. "We have decided to hive off our non-core businesses, including infotech and offshoring services as well as real estate assets. This will help us to concentrate more on our target business area of providing network services and infrastructure to telecom service providers," GTL CMD Manoj Tirodkar said.
Though the company has not divulged the deal size, investment banking sources said it would be valued at around Rs 200-250 crore. Standard Chartered was the adviser for GTL while BMR Advisors was France Telecom’s due diligence partner.
GTL infotech business has 590 employees. The division posted Rs 140 crore revenues during the last financial year.
The sale would not affect the company's revenue growth, said Charudatta Naik, COO, GTL. "The growth guidance of 30 per cent for this financial year was given for the network services business in the telecom domain. So the divestment of the infotech business will not have a major impact on our future revenues,” he said.
GTL expects its revenues after the sale to reach Rs 1,600 crore and earnings before interest, tax, depreciation and amortisation (EDITDA) to touch Rs 2,200 crore in 2007-08.
France Telecom said the investment would strengthen its presence in India and the Asia-Pacific region. "The acquisition will help us in improving our remote management of our networks, CRM solutions and applications and WAN/LAN integration and optimisation," said Barbara Dalibard, CEO, Orange Business Services.
France Telecom offers integrated business communications solutions spanning consultancy, data, voice and video and mobile. The acquisition would be France Telecom's re-entry into the Indian telecommunication market. It had a 26 per cent stake in BPL Mobile, which it sold to the Essar group and Mauritius-based Asia Pacific Investments.