Tele Buy

Dec 14, 2011 (LBO) – Sri Lanka’s Dialog Axiata, said it will buy Suntel, a fixed access unit of Sweden’s Overseas Telecom AB for a little over 34 million US dollars to expand its fixed wireless business. Dialog Broadband had posted revenues of 1.8 billion rupees for the nine months ending September 2011.

Suntel, which has 382 base stations, will be bought through Dialog Axiata’s Dialog Broadband fixed access unit.

The merged entity will create the second largest fixed access provider in the country with a 23 percent market share, the firm said in a statement.

Dialog Axiata group chief executive Hans Wijayasuriya said the merged firm provide high quality, affordable fixed telecommunications and broadband services, using the group’s expanding fibre optic network.

Jeremy Huxtable, managing director of Suntel said the merger of the two firm will improve economies of scale and renew investment in fixed telephony and broadband.

Dialog Broadband will pay between 33.9 million and 34.9 million US dollars after completing due diligence which will value the firm around 3.0 to 3.1 times 2010 EBITDA (earnings before interest tax depreciation and amortization), the firm said.