Tata Communications is all set to acquire US-based Switch Enterprises. The company on Thursday informed that it has entered into a definitive agreement through its wholly owned international subsidiary Tata Communications (Netherlands) to acquire the New York-headquartered company for Rs 486 crore. Under the terms of the agreement, Tata Communications has agreed to acquire a 100 percent equity stake in The Switch Enterprises, LLC and certain of its international assets for a value of approximately $58.8 million (Rs 486.3 crore) in cash, according to the regulatory filing. The acquisition is expected to be completed within 4-6 months or as soon as possible thereafter. The closing of the transaction is dependent upon regulatory approvals.
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The Switch is an end-to-end live video production and transmission services provider. The acquisition of Switch is expected to help in expanding Tata Communications’ video connect business as well as expand the company’s presence in the media ecosystems of Europe and North America. “With this transaction, Tata Communications will gain a strong foothold into America’s media and entertainment market, extend its portfolio into live video production and become uniquely positioned as an end-to-end media ecosystem player in the entire content development value chain globally,” Tata Communications told exchanges.
Apart from acquiring a 100% stake in the company, Tata Communications will also acquire assets of the subsidiaries of Switch Enterprises based out of Canada, the US, and the UK. The Tata group company said that it will extend its portfolio into live video production and aims to be positioned as an end-to-end media ecosystem player. After the deal, Tata Communications will support Switch customers with global reach to over 190 countries and territories. “The Switch will bring state-of-the-art live production capabilities helping organisations to produce high quality, more immersive content faster and more efficiently,” the company said.
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Switch was founded in 1990. It produces and delivers live content to any outlet including linear, on-demand and streaming platforms across any medium. For the full year ending December 2021, Switch had a consolidated revenue of $81.6 million or Rs 674.8 crore. The company’s revenue declined to $68.6 million in 2020 before a rebound in 2021. Revenue in 2019 stood at $76.5 million.
Tata Communications shares fell nearly 1% on Thursday, and were trading around Rs 1,260 on NSE. So far this year, the stock has declined around 12%. Earlier this month, Tata Communications transferred its non-network Internet of Things (IoT) business to its wholly-owned subsidiary Tata Communications Collaboration Services Pvt. Ltd. (TCCSPL) for a cash consideration of Rs 42.34 crore.
