Arvind unit Syntel Telecom buys 2 Enkay Technologies firms
Mumbai: Syntel Telecom Ltd, a unit of Arvind Ltd, has signed a deal to buy two divisions of Enkay Technologies (India) Pvt. Ltd, two persons aware of the development said. Mumbai-based investment bank Singhi Advisors was the sole adviser in the transaction. The deal value could not be ascertained.
Both companies operate in the so-called unified communications market. While Syntel distributes audio and videoconferencing products, among others, from multinationals such as Alcatel-Lucent, Cisco and NEC, Enkay is a technology provider. The deal will help Syntel offer enterprise communications solutions, one of the two persons cited above said on the condition of anonymity.
Among Enkay’s three business verticals, Syntel will buy two—unified communications and audio-visual system integration—while integrated security solutions will remain with Enkay, the second person said, also on the condition of anonymity. Emails sent to Dayal Hemrajani, chairman and managing director of Enkay Technologies and a spokesperson for Arvind Ltd were not answered.
Syntel, which started operations in 1989 as a CDoT (Centre for Development of Telematics) licensee for digital public and private switching equipment, has leveraged its distribution infrastructure in the small and medium enterprises segment. The firm’s major customers include Indian Railways, Fortis Hospitals, SBI Life Insurance, Federal Bank, PepsiCo, Godrej, Ashok Leyland, Flipkart and Ogilvy. Founded by Hemrajani 35 years ago, Enkay offers integrated communication solutions—IP telephony, contact centre, data networking, IT, audio visual system integration and video conferencing to IP surveillance and security solutions. It has eight offices and over 220 employees, with strong presence in sectors like hospitality, manufacturing, pharmaceuticals, retail, healthcare, realty, information technology and financial services.
“The wide expansions taking place in areas like financial services in India makes unified communication a fast growing sector and all the global and domestic companies are vying for a major pie through the inorganic growth route,” said a Mumbai-based investment banker on the condition of anonymity. The increased requirement for audio-video conferencing across sectors also heightened the scope for unified communications in India, he added. Major companies in India’s unified communications and collaboration market include Microsoft Corp., Avaya Inc., Alcatel-Lucent, Cisco Systems, NEC Corporation, Siemens, ShoreTel, Tata Communications, AGC Networks, Wipro and PeopleLink. The unified communications market in India is around $1.5 billion, the banker quoted above said. Syntel and Enkay are the leaders in India’s unified communications and collaboration solutions industry.
Syntel serves more than 4 million users via 300 channel partners across India, backed by seven branch offices and over 100 field resources for sales. It is also a vendor for many leading telcos in India.
Unified communication helps business houses conduct live training sessions and discussions across countries, reduce product development cycles and enhance team communication. The SME businesses are shifting from the traditional time division multiplexing (TDM) telephony structure to IP (internet protocol) telephony and VoIP (Voice over IP) solutions, making the space attractive for strategic investors. Increased spending in sectors like education, corporate information technology and infrastructure is also expected to aid growth in the audiovisual system integration (AVSI) market in India.
Besides telecom, Arvind has diversified into other major segments like fabrics, garments, chemicals, dyes, retail, engineering, real estate and sustainable agriculture.