August deadline for Byju’s to pay Blackstone $200mn
Premium- Dues to private equity giant Blackstone from Aakash sale pending; parties had agreed to two-month delay
MUMBAI : Byju’s needs to pay nearly $200 million to US private equity giant Blackstone Inc. by next month as part of the acquisition of Aakash Educational Services Ltd (AESL), two people aware of the matter said.
India’s most valuable startup announced the takeover of AESL in April 2021 in an approximately $1 billion deal. The transaction involves a 60-70% payment in cash to both Blackstone and the Chaudhry family that founded Aakash. The remainder is planned to be paid out as shares of Byju’s.
As part of the deal, Byju’s was to buy Blackstone’s stake in test preparation leader AESL by June, but both parties agreed to a two-month delay.
On 4 July, Byju’s said it had cleared payments to the Chaudhry family. But this did not include payments to Blackstone.
Before the Byju’s deal, Blackstone owned around 38% of AESL with the rest owned by the Chaudhry family.
Bloomberg reported on Monday, citing a spokesperson for Byju’s, that the company has yet to receive $250 million from Oxshott Ventures and Sumeru Ventures due to “macroeconomic reasons". The payment from the two investors is part of the $800 million fundraise by Byju’s announced in March that valued the firm at $22 billion.
Meanwhile, the three parties have separately filed documents at the National Company Law Tribunal (NCLT) for the merger of AESL with Think & Learn Pvt. Ltd, the parent of Byju’s.
One of the two people cited above said the deal is “on track" to close by August-end as planned. However, any delay in receiving approval from the NCLT may prolong the process.
While cash payments are due by 23 August, the merger filings depend on the NCLT schedule and could even extend up to September, the second person added.
Blackstone and Think & Learn declined to comment.
Blackstone will also receive additional shares amounting to 0.75% to 1% in Byju’s after the NCLT merger process is approved, as reported by Mint on 6 July. Blackstone’s Strategic Opportunities Fund owns an unspecified stake in Byju’s, having invested in the company separately in June 2021 as part of a nearly $340 million funding round.
Byju’s is also backed by Silver Lake Management, Naspers and Mary Meeker’s Bond Capital. The edtech firm has about 115 million students using its online learning platform, with 7 million of them being annual subscribers.
For Byju’s, the Aakash deal closing comes in the midst of a ‘funding winter’ for the startup ecosystem. This would be the biggest acquisition so far for Byju’s. Founded in 2011, the Bengaluru-based firm has acquired over 20 companies across multiple geographies so far.
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In recent weeks, Byju’s has also been attempting to mount a more ambitious acquisition campaign for Nasdaq-listed 2U. Mint reported on 5 July that Byju’s is planning to raise $2.4 billion in acquisition finance for this deal.