SUMMARY
Tata Communications will assume all outstanding debts of Kaleyra as part of the acquisition deal, which is slated to close in the next six to nine months
The acquisition will enable Tata Communications to leverage Kalyera’s resource base, expertise and scale to strengthen its presence in the US
Tata Communications will acquire 100% stake in the listed startup for $7.25 per share, a significant premium from $0.13 at which the stock closed on June 28
Tata Communications on Wednesday (June 28) said it has signed a definitive agreement to acquire US-based omnichannel integrated communication services provider, Kaleyra, for $100 Mn in an all-cash deal.
Under the terms of the agreement, Tata Communications will acquire 100% stake in the listed startup for $7.25 per share. This represents a significant premium compared to the $0.13 levels at which the stock closed on June 28.
In a statement, the conglomerate also said that it will also assume all outstanding debts of Kaleyra. The startup currently has a gross debt of $224.9 Mn and a net debt of around $150 Mn.
The acquisition will enable Tata Communications to leverage Kalyera’s resource base, expertise and scale to strengthen its presence in the US. The move will also synergise Tata Communications’ extensive network of clients globally to shore up and expand the US-based firm’s operations.
The move will also enable Tata Communications to fortify its position in the communications tech market, and is part of the company’s strategy to solidify its industry 4.0 offerings.
The deal is still subject to several conditions and approvals, and is expected to close in the next six to nine months. Post the execution of the transaction, Kaleyra will operate as a subsidiary of Tata Communications.
“With this investment in Kaleyra, we will accelerate our push into the customer interactions platform market and fortify our global CommTech position… With this acquisition, we will further build intelligent, intuitive and innovative multi-channel communication solutions to unlock new growth opportunities for our customers,” said Tata Communications managing director and chief executive officer (CEO) AS Lakshminarayanan.
Reacting to the development, Kaleyra CEO and cofounder Dario Calogero said, “When we launched Kaleyra 24 years ago with my cofounder Simone Fubini, I could hardly envision that our voyage would take us from a small Italian startup, to global expansion, a publicly listed NYSE company, and now working together with a great technology leader like Tata Communications. This is a great day for Kaleyra and our shareholders, and our employees worldwide.”
Kaleyra is a New York Stock exchange-listed company that offers a suite of proprietary tools that targets user personalisation via chatbots, messaging, video and push notifications. The firm counts clients in areas such as banking and financial services, retail, and digital commerce.
The company last reported revenue of $339.17 Mn in 2022, up from $267.74 Mn recorded in the previous year.
Tata Communications plans to Kaleyra to further bolster its presence in the burgeoning Communication Platform as a Service (CPaaS) market. The consolidated entity will compete globally against the likes of Twilio, Tanla, Route Mobile and Netcore Cloud. As per a report, the global CPaaS market space is projected to grow to a market size of 45.3 Bn by 2027.
