BYJU’S mulls selling Epic for $400M to Joffre Capital; other potential buyers interested
At least 3-4 potential buyers are in the mix, with final bids expected by the middle of next week. A deal is more likely to materialise in December.
Edtech firm is engaged in advanced discussions to offload one of its assets, Epic—a digital reading platform for children, to tech-focused buyout firm Joffre Capital Ltd, with the potential transaction estimated to be valued at about $400 million, according to a media report.
The potential sale is part of the edtech company’s strategy to repay the debt associated with a $1.2 billion term loan B (TLB) owed to its lenders.
Bloomberg has reported that Moelis & Co is overseeing the Epic sale process and a potential deal could be reached as early as this month, although a final decision has not been reached. US-based edtech firm Duolingo and others have also shown interest in Epic’s acquisition, the report added.
At least 3-4 potential buyers are in the mix, with final bids expected by the middle of next week, a person aware of the development told YourStory. A deal is more likely to materialise in December, they added.
BYJU’S declined to comment on the matter.
YourStory has reached out to Joffre Capital and Duolingo for comments.
In 2021, BYJU’S acquired Epic for $500 million to help expand its US footprint.
Earlier in September, YourStory reported that BYJU’S was considering selling two of its holdings, Epic and Great Learning, to generate a minimum of $800 million to settle the TLB debt. The divestiture of these two assets is part of the Byju Raveendran-led firm's plan for an accelerated repayment to its lenders, offering to fully repay its TLB within a period of six months.
For nearly a year, both parties have been embroiled in a conflict, with multiple rounds of negotiations to amend the TLB agreement. BYJU’S and its lenders were expected to finalise a term loan amendment before August 3, 2023.
The development on Epic follows closely on the heels of BYJU’S releasing specific financial figures related to its core business as part of the audited financial results for the fiscal year 2021-22 (FY22).
In FY22, the core business earned a total income of Rs 3,569 crore, up from Rs 1,552 crore in the previous year, and the EBITDA loss decreased to Rs 2,253 crore from Rs 2,406 crore in the previous financial year, according to a company statement.
The company did not divulge the net loss from its core business. It also did not disclose its consolidated revenue and profit/loss numbers for FY22—a period in which it made nine acquisitions.
Post the pandemic-led edtech boom, BYJU’S continues to face several challenges, including conflicts with TLB lenders and developments concerning its test prep unit, Aakash, along with other ongoing issues.
Last month, BYJU’S lenders appointed Kroll, a risk and financial advisory solutions firm, to safeguard the charged assets belonging to Great Learning Education Pte. Ltd. and BYJU’S Pte. Ltd., the firm’s Singapore entity. BYJU’S had acquired skilling startup Great Learning for $600 million in 2021.
Edited by Kanishk Singh