Home / Industry / Telecom /  Tata Communications to acquire US-based CDN for $59 mn

Telco player Tata Communications’ Dutch arm has entered into an agreement to fully acquire US-based media service provider, Switch Enterprises for a cash consideration of $58.8 million (around 486.3 crore). 

 “Tata Communications (Netherlands) B.V., a wholly-owned indirect subsidiary of Tata Communications Limited, has entered into a membership investment purchase agreement to acquire 100% equity stake in Switch Enterprises, LLC, (a target company in the United States of America) and as part of the transaction, through its wholly-owned subsidiaries, will acquire assets of the subsidiaries of Switch Enterprises, LLC based out of Canada, the United States of America and the United Kingdom. The acquisition is subject to regulatory approvals," the company said in a regulatory filing on BSE. 

Shares of Tata Communications ended Thursday’s session with mild losses of 0.2% at 1,267.05 apiece. 

The acquisition does not classify as a related party transaction and is expected to be conclude within 4-6 months. 

Switch Ent is a managed services’ providers for live production and video transmission. It produces and delivers live content to any outlet including linear, on-demand and streaming platforms across fiber, satellite or internet. The company recorded a revenue of $81.6 million (around 674.8 crore) for CY21. 

According to the statement on bourses, the acquisitions will provide direct upsell opportunity for Tata Communications’ offerings, which will drive expansion of its video connect business as well as its presence in Europe and North America. 

The global commercial peer-to-peer content distribution network (CDN) market is expected to grow from to $3.29 billion in 2022 from $2.75 billion in 2021, according to a report by reportlinker.com. 

 “The commercial P2P CDN market may clock a compound annual growth rate (CAGR) of 14.91%, recording a revenue of $5.73 billion, till 2026. North America was the largest region in the commercial P2P CDN market in 2021," the report added. 

In another telecom deals recently, Bharti Airtel, earlier this week acquired 8% stake in Bengaluru-based marketing automation firm Lemnisk for an undisclosed sum. The investment will be a part of Bharti’s startup accelerator programme.

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