TA targets remote communication networks

TA has made in the region, at least three have focused on communications.

In 2006, the firm teamed up with Providence Equity Partners, ChrysCapital Partners and Citigroup Venture Capital International to acquire a 34.5% stake in India's Idea Cellular for $1 billion. Three years later, it committed $49.4 million to MicromaxInfoamtics, an Indian handset manufacturer.

The latest investment is a carve-out from Hong Kong-listed Asia Satellite Telecommunications. Established in 1999, SpeedCast - with a strong focus on Asia, the Middle East and Africa - provides satellite-based broadband access services, managed networking solutions and value-added services to the likes of telecom carriers, internet service providers and governments. It operates in locations where wire-based communication is not possible.

"This industry is tied to several other dynamics industries including oil, gas, mining, and maritime which are all growing more rapidly in Asia than many other areas in the world," Edward Sippel, managing principal of TA Associates Asia Pacific, tells AVCJ. "SpeedCast is the leading provider in Asia and the market is highly fragmented."

Company management is also participating through ownership of a small minority interest in TA's special purpose vehicle SpeedCast Acquisitions. Pierre-Jean Beylier will remain CEO of SpeedCast, while Sippel and Michael Berk, managing director at TA Associates, will join the company's board.

"While TA Associates only focuses on fast growing companies which are doing very well, we are always happy to have CEOs staying with us because we like their management styles," Sippel adds.

Very small aperture terminal (VSAT) services - a key technology deployed by SpeedCast - are expected to see annual revenue growth of 8% over the next five years in Asia, the Middle East and Africa, approximately twice the rate of Western markets. In 2011, SpeedCast recorded a net profit HK$25 million ($3.2 million), up 9% from the previous year, based on revenues of HK$239 million.

According to industry analyst Comsys, revenues for worldwide maritime VSAT services also doubled to $800 million between 2004 and 2009. Last November, SpeedCast launched SeaCast, which serves the broadband needs of the maritime and offshore oil and gas industries.

"In the medium term, the opportunity for SpeedCast is to continue to expand and grow the company organically and as appropriate, consolidates the industry through selective mergers and acquisitions," says Sippel.

"This is an area where TA can add value because we have an established global network to help the company identify and execute on expansion strategies."

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• Topics
• Greater China
• Buyouts
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• TA Associates
• buyout
• TMT
• China