Networks' broadband dialogue Limited (DBN), a wholly owned subsidiary of Sri Lanka leading mobile service provider Dialog Axiata PLC yesterday entered into an Agreement for Purchase of Shares (SPA) to acquire 100 percent of the shares of the fixed-line wireless Suntel Ltd of its current shareholders.

The final implementation of the acquisition will satisfy the conditions precedent to the operation defined in the SPA.

The successful consummation of the transaction during the course of the coming months is expected to bring to the merger of operations and Suntel DBN and the creation of a new entity, providing advanced line and fixed broadband services to Sri Lanka to consumers.

Suntel began operating in 1996 and currently is a subsidiary of Swedish telecom operator Telecom AB abroad. Other shareholders include Suntel NDB (National Development Bank PLC), C-Tech Investments (Private) Ltd, Kelmarsh Investments Ltd., Townsend Limited and International Finance Corporation (IFC). "The telecommunications sector in Sri Lanka after 15 years of solid growth is requesting the consolidation," said Jeremy Huxtable, Managing Director of Suntel. "Suntel is committed to providing a superior service to our loyal customer base, and today we are at a point in our evolution where investments optimistic and forward thinking are needed to increase our broadband infrastructure to best in class standards . "

"I think the industry consolidation that crystallizes the economies of scale and brings together the shared effort and investment capacity of the leading players in the industry is an optimal strategy to provide value to consumers and industry in general in the future. The agreement came into our DBN shareholders paves the way for a renewed investment in Sri Lanka fixed telecommunications and broadband sector which I think will be beneficial to all concerned. "Suntel fixed telecommunications infrastructure is based on a 382-base station network to deliver strong fixed voice, broadband and data communications services using CDMA, WiMAX and other fixed wireless technologies.

The share purchase agreement signed between DBN and the shareholders of Suntel provides that the transaction is completed in an EV (Enterprise Value) in the range of U.S. U.S. $ 33.9 m $ 34.9 m, which corresponds to a valuation multiple of 3.0 x 3.1 x EBITDA for FY10, depending on the outcome of the confirmation business valuation and due diligence during the period prior to the completion of the transaction . President of the broadband networks of dialogue and CEO of Group PLC dialogue Dr. Hans Wijayasuriya Axiata Commenting on the transaction, he said, "We are privileged to have had the opportunity to combine with Suntel through this initiative beachhead industry consolidation. In the future, the combined forces of DBN and Suntel is synergised towards establishing a better platform for the kind of infrastructure to supply high quality telecommunications and fixed broadband services, which are expansive in its availability, and inclusive in terms of accessibility to the citizens of Sri Lanka. "