The Anil Ambani group has made its first major overseas acquisition after the split in the Reliance group two years ago. Reliance Communications has announced the signing of a definitive agreement to acquire US-based Yipes Holdings, the leading provider of managed ethernet services, for around $300 million (Rs 1,200 crore).

Yipes, headquartered in San Francisco, owns over 22,000 route km of fibre across 14 US metros, which covers around 40 per cent of the total US datacom market. Yipes is present also in London, Hong Kong and Tokyo. Flag Telecom, a subsidiary of Reliance Communications, is acquiring 100 per cent of Yipes in an all-cash transaction.

Said Anil D Ambani, chairman of Reliance Communications: “We see potential to rapidly expand Yipes coverage in the US and to globalise Yipes service by leveraging our customer relationships and network reach around the globe. We expect this acquisition to enhance the growth rate, profitability and returns of our global data business. “

Established in 1999, Yipes has pioneered metro ethernet and has developed leading edge proprietary products to meet the exacting requirements of its customers. Ethernet is the fastest growing segment of the data communications market, driven by the migration of enterprise customers from older private network technologies. The ethernet services market is expected to surge by over 30 per cent CAGR from 2006 to 2010 when it will top $25 billion worldwide.

Yipes has 1,000 enterprise customers, across 4 industry verticals, financial, legal, government and healthcare, which account for 50 per cent of the Ethernet market. Yipes has developed communications platforms that act as the oxygen for entire industry communities. It is the leading direct communications provider to NYSE, Chicago Mercantile Exchange and NASDAQ and interconnects with multiple market participants and intermediaries.

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