MUMBAI / NEW DELHI: Textbook-focused publishing firm S Chand and Company has picked up a majority stake in Kolkata-based publisher Chhaya Prakashani, for an undisclosed sum.
While the financial terms of the deal were not disclosed, sources aware of the developments told ET that the transaction was done at a total enterprise value of Rs 220 crore, making this one of the largest deals to have been struck in the country’s education content space.
The acquisition is also expected to push S Chand’s turnover to over $100 million, according to analysts. The company closed fiscal 2016 with sales of Rs 540 crore, while Chhaya Prakashani closed financial year 2015-16 with turnover of Rs 126 crore.
The acquisition of Chhaya Prakashani, which is believed to be the largest publisher in terms of reach in eastern India, is the third such deal struck by the 77 year-old S Chand, and follows its buyout of Delhi-based publisher New Saraswati House in 2014
“Given the strength of Chhaya in the East India market and Sumit’s (Biswas – CEO of Chhaya Prakashani) excellent record of providing top-class content to students, we are proud to have them as a member of the S Chand family,” said Himanshu Gupta, managing director, S Chand Group.
Prior to that, the New Delhi-based company had acquired Vikas Publishing House and Madhuban Educational Books for reportedly $20 million-$25 million in 2012.
The deal comes at a time when the Everstone Capital and International Finance Corp-backed publishing firm is actively exploring an initial public offering (IPO), and has held talks with a number of prominent merchant banks, including, EdelweissBSE -1.84 %, JM FinancialBSE -1.43 % and Axis CapitalBSE -2.06 %, for the mandate, and which was first reported by ET in April earlier this year.
At the time, Gupta had said talks were only at an exploratory stage, and that an IPO was just one of the routes to raise fresh capital. Talks are believed to have progressed since then.
A potential public market debut by S Chand next year could come on the heels of another much-anticipated IPO by an education services and publishing company, CL Educate, which is expected to file its final offer documents with market regulator SEBI later this month.
S Chand, which has also been making a concerted foray in the digital content space, closed a $27 million equity financing round in November last year, led by IFC, the private sector investing arm of the World Bank, and , and existing investor Everstone Capital.
The company has also made a spate of investments in education technology startups, such as tutor search platform FlipClass, ed-tech startup Smartivity Labs and Testbook.com, an online test preparation platform for competitive exams, amongst others, making it one of the most active players on the M&A leaderboard.