Deutsche Telekom is acquiring a 17% stake in Indian start-up Devas Multimedia for $75 million in a deal that values the company at Rs 1,865 crore or about $443 million.
Devas is a Bangalore based company which plans to deliver content via a hybrid satellite-terrestrial network to mobile devices. It works in the area of software development and R&D for multimedia content creation and transmitting content using internet, satellite and terrestrial broadcasting.
Under the deal, Deutsche Telekom would subscribe to up to 28,349 equity shares in Devas. India’s Foreign Investment Promotion Board (FIPB) approved the deal, which would give the German telco an option to acquire additional equity shares of up to 26% of the total paid-up share capital to ensure compliance with the 74% FDI cap in the telecom sector.
Other investors in Devas include venture capital funds Columbia Capital and Telecom Ventures, which jointly picked up an over 49% stake in the company in 2006.
Devas Multimedia is currently working with the Indian Space Research Organisation (ISRO) on providing videos and TV channels on mobile phones. The services would be launched in 2009-10 after ISRO launches its new GSAT-6 satellite either later this year or next year.
[Via: Economic Times India]