Private equity firm TA Associates and Argan (Mauritius), a company controlled by Indium V, are to invest approximately USD500 million to acquire shares of Atria Convergence Technologies, a provider of broadband services in India.
The transaction is expected to close subject to customary closing conditions, including the receipt of required regulatory approvals. As part of this transaction, the incumbent shareholders of ACT, including India Value Fund III (sole trustee of IVF Trustee Company Private Limited), the current majority shareholder of ACT, will be divesting a significant portion of their shareholdings. India Value Fund Advisors (IVFA), one of India’s leading private equity firms, is an advisor to Indium V and a manager of India Value Fund III.
ACT and its group companies serve more than one million retail customers, offering wired broadband and cable TV services in South India, across Telangana, Karnataka, Andhra Pradesh and Tamil Nadu. Utilising the latest in optical fibre technology and a company-owned last-mile network, ACT provides high-speed connectivity in India. ACT is headquartered in Bangalore, India.
“We believe that in the coming years, India will see a significant increase in wired broadband penetration,” says Dhiraj Poddar, Co-Head of India at TA Associates Advisory Pvt. Ltd., who will join ACT’s Board of Directors at the close of the investment. “ACT has implemented an effective and service-driven strategy using fiber-to-the-home technology to target and deeply penetrate select markets. The company has rapidly acquired broadband customers and established a strong brand across South India. With a proven record of execution, an attractive business model, and an experienced and highly capable management team, we expect continued growth for ACT.”
“We welcome TA Associates’ strategic and financial support, and are very pleased to partner with the firm. We are also happy that this transaction maintains our continued engagement with IVFA, which has played an instrumental role in envisioning and building ACT’s business,” says Bala Malladi, CEO, Atria Convergence Technologies. “Broadband is becoming a necessity for many households in India as users seek always-on, reliable and fast connectivity. We will leverage our relationship with TA and IVFA as we continue to thoughtfully grow our business, increase ACT’s presence in our current markets, and target new cities and regions where we see significant opportunity.”
“With TA Associates and Argan coming on board, ACT is positioned to leverage its deep understanding of the growing demand for high-speed broadband by aggressively building out access and service for the customer,” says Sunder Raju, Managing Director and the original founder of Atria Convergence Technologies.
According to the Telecom Regulatory Authority of India (TRAI), of India’s 250 million households, only approximately 15 million, or six percent, have a wired broadband connection.
“The number of wired broadband connections in India is still very low, especially compared with growing economies such as China, and most of those connections are via slower, low-quality DSL networks,” says Naveen A Wadhera, Co-Head of Asia at TA Associates Asia Pacific Ltd, who will also join ACT’s Board of Directors at the close of the investment. “With high-speed broadband connectivity expected to increase meaningfully in India over the next five years, and with ACT’s history of building market share and meeting customers’ needs, we see significant opportunities for the company.”
“Our long and fulfilling engagement with ACT since early 2008 has been one of our most professionally satisfying experiences,” says Vishal Nevatia, Managing Partner, India Value Fund Advisors. “We believe that ACT, backed by its strong management team and superior technology architecture, has the potential to become one of the most admired Internet Service Providers in India, providing its customers with world-class wired broadband products.”
