Tata Communications acquires US-based Switch Enterprises for ₹486 cr

Tata group's Tata Communications has signed a deal via its Netherlands business Tata Communications B.V. to acquire the US-based The Switch Enterprises, LLC for ₹486.3 crore. Through the acquisition, the company aims to gain a strong foothold into the US media and entertainment market by extending its portfolio into live video production. A company statement says it aims to become an end-to-end media ecosystem player in the global content development value chain.

Tri Pham, chief strategy officer at Tata Communications, said, “Our combined forces of The Switch’s strong presence in North America and Tata Communications’ global position will create a formidable powerhouse in the global media ecosystem helping enterprises harness emerging digital consumption patterns to drive innovation and disruption. In addition, The Switch production infrastructure as a service model will allow Tata Communications customers to accelerate adoption of remote production from any event around the world.”

Under the terms of the agreement, the company has agreed to acquire 100% equity stake in The Switch Enterprises, LLC and certain of its international assets for a value of ₹486.3 crore in a cash only transaction. 

“The closing of the transaction is dependent upon regulatory approvals. With both companies coming together, Tata Communications will support The Switch customers with global reach to over 190 countries and territories and The Switch will bring state of the art live production capabilities helping organisations to produce high quality, more immersive content faster and more efficiently,” the company said.

Through this, both the companies will help the global media and entertainment industry evolve to the next level of at-venue and at-home fan engagement.

Dhaval Ponda, global head of media & entertainment business, Tata Communications said, “Tata Communications is already helping some of the largest global sports federations, broadcasters and OTT platforms manage this disruption through our next generation digital media platform. With The Switch team, we will now be able to develop holistic, scalable solutions encompassing live and scheduled programming for television, leveraging pre-recorded and filed videos for new content creation as well as all post-production. The Switch and Tata Communications teams, together will help the industry evolve to the next level of at-venue and at-home engagement.”

Between the July to September quarter this year, the consolidated profit of Tata Communications witnessed a surge of 25% yeart-on-year to ₹532.29 crore. The company’s revenue grew 6% to ₹4,430 crore during the quarter.

Meanwhile, for the year ended December 31, 2020, The Switch’s consolidated revenue stood at ₹674.8 crore. “With Tata Communications we will accelerate this journey providing stability, investment and vision in support of future growth,” Eric Cooney, president and CEO, The Switch said.

Following the development, the share price of Tata Communications plunged 1.27% to ₹1,253, at the time of reporting. On Thursday, the stocks of Tata Communications opened higher at ₹1,277 against the closing price of the previous session at ₹1,269.