BYJU'S in talks to sell US unit Epic for $400mn
What's the story
Indian edtech giant BYJU'S is reportedly in advanced talks to sell its US-based kids' digital reading platform, Epic! Creations Inc., for about $400 million (roughly Rs. 3,328.5 crore) to Joffre Capital Ltd. The sale could help BYJU'S ease financial strain and raise funds to pay down a disputed $1.2 billion (roughly Rs. 9,985.7 crore) term loan. Other bidders, including Duolingo Inc., have also shown interest in acquiring the platform.
Details
Financiers were surprised by the repayment proposal
BYJU'S, amid its global acquisition spree during the pandemic, faced a delay in paying interest on a term loan. This delay has led to a disagreement with its creditors. According to a September Bloomberg report, BYJU'S surprised financiers by proposing to sell assets to clear the $1.2 billion debt within a short six-month period. Moelis & Co. is said to be handling the sale of Epic!, with a transaction likely to be completed this month.
Insights
BYJU'S sees 2.3x revenue growth
BYJU'S parent company, Think and Learn Private Limited (TLPL), recently released its financial audit for FY22. The edtech firm reported a standalone revenue of Rs. 3,569 crore, a major increase from Rs. 1,552 crore the previous year. This growth was driven by the core business of the company, excluding all acquisitions.
Facts
About Joffre Capital Ltd.
Joffre Capital Ltd., the potential buyer of Epic, was founded by Chinese dealmakers, including James Lu, a former executive at Chinese search engine Baidu Inc. Other founders have extensive experience in technology and finance, holding senior positions at companies like Amazon.com Inc., Warburg Pincus LLC, and Goldman Sachs Group Inc.