BT, EMW in talks to acquire GTL IT unit

Global majors British Telecom (BT), US-headquartered EMW and a number of systems integrators (SI) are in advanced stages of negotiations with GTL for a possible takeover of its IT business. The acquisition price is believed to be hovering at around $60-70 million.

GTL, a network services provider, has recently decided to hive off its IT business to concentrate on its core business. It would also scout for acquisitions in the network services space that would be funded from the selling of its IT business.

According to sources close to the development, the companies are in advanced level of discussions and GTL is expected to the deal in the next four to six weeks.

Foreign players are interested in IT business as it will help them get a foothold in the Indian network space.

GTL's IT business division offers enterprise solutions and managed services to medium and large corporates, and has over 500 clients in the IT, ITeS and BFSI segments. At present, it employs around 350-400 personnel.

When contacted, a GTL official said, "We are in advanced stages of negotiations with several players, both national and international, and should be able to close a deal in the next 30-45 days".

However, he did not disclose the names of the companies GTL was in talks with, citing non-disclosure agreements.

EMW is a global service solutions provider, systems integrator and turnkey solutions provider with presence in the US, Belgium, USE and China. UK-based BT is a leading network and telephony solutions provider. The names of the system integrators also could not be ascertained.

According to analysts tracking the stock, the proposed hive-off will be beneficial to GTL and will enhance the return on capital employed and earnings per share (EPS).

Recently GTL has also announced the buyback of its shares of around Rs 285 crore at Rs 300 per share through a tender route.