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Education-focussed publishing house S Chand & Company, which got SEBI nod for an initial public offering (IPO), is scouting to acquire regional content houses.
The company also plans to further its presence in the higher education business, particularly in the test preparation market.
“To increase our market share in the State Board segment, our strategy is to acquire leading regional content houses in attractive markets. These regional acquisitions would enable us increase our market share, acquire distribution networks catering to State Board-affiliated schools, reach out to a larger number of schools and students, and also allows us to leverage our content capability to enhance the product offerings,” S Chand said in its Draft Red Herring Prospectus (DRHP) with SEBI.
“We believe that this test preparation market will continue to expand as more government jobs become available that require examinations at the national and state levels,” it added.
In fiscal 2011, S Chand’s most important subjects were English grammar, Maths and Science. But then, the company made a string of acquisitions to expand its portfolio.
In 2013, the company acquired two brands - Madhubun and Vikas - to improve its Hindi language titles in the kindergarten to STD XII (K-12) businesses and later in fiscal 2015, it acquired Saraswati brand to strength its French, languages, arts and crafts titles.
S Chand, which is backed by private equity investor Everstone Capital, had filed DRHP with SEBI in December 2016 for a ₹600-crore IPO (fresh issue of ₹300 crore and ₹300 crore offer for sale).
JM Financial, Axis Capital and Credit Suisse are the bankers to the issue, which received market regulator’s ‘observation' — a mandatory requirement to launch the public offer — on March 3.
The company intends to use the proceeds to repay loans worth ₹240 crore and acquisition of Chhaya Prakashani, a Kolkata-based publisher of educational books (K-12, college and engineering), it bought in 2016 for ₹220 crore.
“In addition, we are open to further brand acquisitions when we find suitable strategic targets that will help us provide complementary content targeted at CBSE and ICSE affiliated schools,” the filing said.
The K-12 education market in India stands at $49.5 billion, comprising 1.1 million government schools and 0.4 million private schools, according to a report by Technopak.
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