NEW DELHI: Dentsu Aegis Network, a global digital marketing communications company, has acquired SVG Media in an all-cash transaction in one of the largest buyout deals in the space in India.
While the terms of the transaction have not been disclosed, London-headquartered Dentsu is said to have paid $110-$125 million (Rs 832-Rs 732 crore) to buy the Gurgaon-based digital media network company. The transaction gives the promoters of SVG Media, the Smile Group, along with Silicon Valley-based investment firm Xplorer Capital, which held about 30%-35% in the company, a handsome exit.
According to a statement released by Dentsu Aegis Network, SVG Media reported revenue of Rs 68 crore for the financial year ended March 31, 2016. It earned revenue of Rs 75 crore, with profit after tax at Rs 1.9 crore in the previous fiscal, according to Tofler, a corporate research and monitoring platform. SVG Media chief executive officer Manish Vij confirmed the transaction to ET and declined to provide details, citing confidentiality. Dentsu, too, did not provide more information.
The deal is the third major strategic acquisition in India’s start up ecosystem, after Naspers-backed global payment service provider PayU snapped up Mumbai-based payments technology company Citrus Pay for $130 million in September.
In October, online travel operator MakeMyTrip acquired smaller rival ibibo Group in an all-stock deal, creating the country’s largest online travel company worth $1.8 billion.
The acquisition of SVG Media comes amid slowing private equity and venture capital deals in the country, with investors tightening their belts as they look to consolidate their portfolios and exit investments made from their 2007 vintage funds.
According to the terms of the deal, Dentsu has acquired SVG Media and its flagship brands – DGM, Komli and Seventynine. The company will join Dentsu’s Asia Pacific digital marketing agency Columbus and be renamed SVG Columbus.
“Given its capabilities in data-led search, performance marketing and mobile, SVG Columbus is ideally positioned to capture the fragmented long-tail publisher market in India using technology and data,” said Ashish Bhasin, chief executive of Dentsu Aegis Network South Asia.
The Smile Group’s Harish Bahl and Vij will step down as chairman and CEO of SVG Media, respectively. Anurag Gupta, CEO of DGM, will be the new chief executive of SVG Columbus.
The Smile Group will retain Tyroo Technologies, a mobile advertising technology venture that competes with InMobi, along with its Tyroo Techlabs incubation business.
This is the second major exit for diversified digital commerce, media and services-focused Smile Group over the past decade. In 2007-08, it sold its digital media agency, Quasar Media, for about $40 million to WPP, the world’s largest advertising group.
“SVG’s market leadership and exit to DAN is another feather in the cap for Smile. Our strategy of investing, building and joint ventures, through one common platform, is uniquely attractive to global unicorns and entrepreneurs, and has evolved over years of learning,” said Bahl.
Dentsu Aegis Network, a wholly owned subsidiary of Japanese advertising and public relations firm Dentsu, operates in 145 countries and has been one of the most aggressive players in the global digital media M&A leader board. The acquisition of SVG Media will be its 29th buyout since November 2014, according to business information platform Crunchbase.