This is the third acquisition by Sun Infoways after it bought out Intratech Inc of the US for an undisclosed sum and the wireless solution business of Diginet for Rs 6.75 crore. Sun Infoways is believed to be in talks with a couple of US companies for further acquisitions.

The consideration for Zap Infotech will be paid in the form of allotment of equity shares and/or warrants convertible into equity shares under preferential allotment of shares. The price of shares to be allotted will be at a premium, which will be decided by the board. The board of Sun Infoways will meet on August 16 to finalise the deal.

Following the takeover, the shareholding of Sun Infoways will be: Promoters 33.75 per cent, Zap as a strategic partner 31.25 per cent, public 28.75 per cent and a US-based strategic investor 6.25 per cent. At present, the promoters hold 54 per cent stake in Sun Infoways, while the public hold the rest.

"Even after conversion, promoters are likely to maintain their stake through induction of strategic investor/subscription to enhance their stake/dilution by the existing strategic partner," Sun Infoways e-strategic Umesh Gowda said here on Wednesday.

Post-acquisition, the capital base would go up to Rs 8 crore from the present Rs 5 crore. This works out to an EPS of Rs 75. The combined networth of the entity would be Rs 530 crore.

Following the acquisition, the Mumbai-based Sun Infoways plans to achieve a turnover of Rs 225-250 crore during fiscal 2000-01. The net profit is likely to touch Rs 55-60 crore. Company officials claim this is the second largest infotech deal in India after Satyam Infoway acquired IndiaWorld.com for Rs 499 crore in 1999.

Sun Infoways is a wireless technology firms with interests in WAP and has a research base in the latest wireless technologies like GPR, G-3, UMTS, Edge, etc. "The union of these two companies will bring more technologies and marketing strengths to Sun Infoways," Zap Infotech promoter Arif Mithani told reporters.

Zap Infotech has been valued in the region of $80 million in March 2000 and $175 million in November 2000 on the basis of milestone valuation approach by a New Delhi-based chartered accountant SS Kothari & Co. Zap, which has reported a turnover of Rs 50 crore during the first quarter of the current fiscal, offers solutions in wireless technologies, wireline, telecom and training in infotech.