Embattled firm Byju’s – which finally got around to release its financials for FY22 after missing the deadline numerous times – is currently in talks with strategic buyers to sell Epic! Creations, its US-based digital reading platform. Looking for ways to generate immediate cash injection, Bloomberg reports Joffre Capital Ltd is one of the strategic buyers, and Byju’s is negotiating with the private equity firm to sell the kids’ digital reading platform for roughly $400 million. This development comes even as Byju’s is reportedly considering selling Aakash Educational Services Limited (which it had acquired for a cash and stock deal of almost $950 million two years ago).
This development comes two years after the Indian decacorn had acquired Epic as part of its global expansion – at that time, it had paid a total of $500 million to acquire the platform. Today, Epic claims to offer a collection of more than 40,000 books on its online platform. This development also makes it clear that the edtech major is actively working to ensure its financial stability. And the fact that it is negotiating two of its biggest assets by exploring an undervalued sale, is a testament to the financial challenges Byju’s finds itself in, and the sheer urgency of immediate cash injection.
It needs capital not just to alleviate its business financial pressures but also meet its debt commitments (including the repayment of the $1.2 billion term loan B (TLB) within six months). The Indian edtech decacorn, known for its aggressive expansion into global markets, had earlier found itself in a challenging situation after missing an interest payment on the term loan, which it had taken to fund its acquisition spree during the pandemic-induced boom in shifting to remote education and work. This, in turn, triggered major disputes and negotiations with its lenders over the terms of repayment. Add regulatory scrutiny to its existing legal battle with its creditors, and it is hardly a surprise that Byju’s has been in hot waters in recent months.
While Joffre Capital Ltd is the primary potential buyer, other interested bidders have also shown their desire to acquire Epic! Creations. One notable contender is Duolingo Inc., which is a well-known mobile learning platforms and the go-to place for swiftly learning multiple languages. To ensure the efficient execution of this sale, Byju’s has engaged the services of Moelis & Co., a global investment bank. This strategic partnership is expected to streamline the sale process and ensure that the transaction proceeds smoothly. The sale could be finalized as early as the coming month, and stakeholders are closely monitoring the developments.