Arvind’s Tele­com Unit to Ac­quire Enkay Tech

The Economic Times - - Companies: Pursuit Of Profit - In­du­lal.PM @times­group.com

Mum­bai: Syn­tel Tele­com, the telecom­mu­ni­ca­tions unit of Arvind, has agreed to buy en­ter­prise uni­fied com­mu­ni­ca­tions provider Enkay Tech­nolo­gies as the 80-year-old tex­tiles and fab­rics ma­jor moves to di­ver­sify and strengthen its telecom­mu­ni­ca­tion and en­gi­neer­ing seg­ment.

Arvind has signed a de­fin­i­tive agree­ment to buy Enkay, which is the mar­ket leader in In­dia in the uni­fied com­mu­ni­ca­tion seg­ment, mul­ti­ple sources with di­rect knowl­edge of the mat­ter told ET. The trans­ac­tion is ex­pected to be an­nounced as early as this week.

Arvind and Enkay de­clined to com­ment. Mum­bai-based in­vest­ment bank Singhi Ad­vi­sors was the sole ad­vi­sor and process run­ner for the trans­ac­tion, sources said.

Syn­tel was founded in 1989. Arvind is the flag­ship com­pany of Ahmed­abad­based Lalb­hai Group, one of In­dia’s largest tex­tiles and fab­rics com­pa­nies. Arvind owns brands such as Fly­ing Ma­chine, New­port and Ex­cal­ibur and has li­censed in­ter­na­tional brands such as Ar­row and Tommy Hil­figer and re­tails it through its na­tion­wide net­work.

The trans­ac­tion will be a ma­jor step in Arvind’s di­ver­si­fi­ca­tion into other busi­nesses, sources said.

Enkay holds the largest mar­ket share in the en­ter­prise seg­ment of uni­fied com­mu­ni­ca­tions and col­lab­o­ra­tion so­lu­tions busi­ness and is cur­rently the seg­ment leader and pre­ferred a busi­ness part­ner in the In­dian hospi­tal­ity seg­ment.

With a rev­enue of over ₹ 100 crore and a gross mar­gin of around 25%, the 25-yearold Mum­bai-based com­pany has a pan-In­dia dis­tri­bu­tion and ser­vice-cum-sup­port in­fra­struc­ture with eight branch of­fices serv­ing both di­rect en­ter­prise cus­tomers and chan­nel part­ners across In­dia.

Syn­tel and Enkay are the largest peers in the uni­fied com­mu­ni­ca­tions and col­lab­o­ra­tion so­lu­tions, both re­tail and en­ter­prise seg­ments in In­dia, with Syn­tel ad­dress­ing the mar­kets through its large dis­tri­bu­tion chan­nel.

Deal will en­able Arvind to di­ver­sify its busi­ness and strengthen its tele­com and en­gi­neer­ing seg­ment

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