US-based Endurance in pact to buy Directi Web for $110 m

Mumbai: Endurance International Group, a US-based provider of cloud-based solutions, has signed an agreement to acquire Directi Web Technology Pvt Ltd for about $100-110 million (Rs 630-693 crore).

Cash & shares
Under the agreement, Endurance International would pay in cash or a combination of cash and shares (based on the seller), according to a filing with the US market regulator Securities and Exchange Commission.

The acquisition is expected to close by the fourth quarter of 2013, it said.

Endurance International, a company controlled by investment firms Warburg Pincus and Goldman Sachs, has already paid $5 million to Directi Holdings (holding company for Directi Web Technology). This would be credited against the acquisition or refunded if the deal fails to go through, it said.

Endurance will pay around half of the total price in cash at the closing of the acquisition.

The Mumbai-based Directi is a Web products development company, founded by Bhavin Turakhia, who now heads the company as its Chairman and Chief Executive Officer. Turakhia, along with his brother Diyank, had set up the company in 1998 with an investment of Rs 25,000.

Business Line could not immediately reach Turakhia for comments.

IPO plan
Endurance is also planning to raise about $400 million through an initial public offering. The company has also filed the initial papers with the US market regulator.

The proceeds from IPO would be used to close the “proposed acquisition of Directi”, apart from repaying debt, the Massachusetts- headquartered company said in the filing.

“We intend to use the balance of our net proceeds of this offering for working capital and other general corporate purposes, which may include the acquisition of other complementary products, technologies or businesses,” it added.

Directi, which provides Web presence solutions to small and medium business in India, the US, Turkey, China, Russia and Indonesia, now employs more than 1,000 personnel. It has more than one million customers across the world.

Product porfolio
The product portfolio of various Directi businesses includes communication and collaboration applications, social networking software, instant messaging, context analysis engines, anti-spam and antivirus solutions among others.

Endurance, founded in 1997 by Indian-origin Hari Ravichandran, owns a slew of online sites such as Domain.com, iPage and HostGator.com among others.