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Byju’s, the country’s largest online edtech start-up, has acquired a 33-year-old brick-and-mortar coaching centre Aakash Educational Services Ltd (AESL) for nearly $940 million in a cash and stock deal.
The deal, in the works for some time now, was formally announced on Monday. Byju’s is currently valued at $13 billion. Post the transaction, founders of Aakash and Blackstone Group, which owns a stake in AESL, will get a minority stake in Byju’s. Aakash will act as Byju’s entrance test preparation arm with a brick-and-mortar focus.
“The deal values AESL at close to $1 billion,” Managing Director & Co-Promoter Aakash Chaudhry told BusinessLine , adding that his family is giving up its entire stake in the firm for a 70:30 cash-equity deal under which they will receive an undisclosed stake in Byju’s for about 30 per cent of the payment.
This is Byju’s second acquisition in less than 12 months. In August last year, it acquired WhiteHat Jr in a $300-million cash deal. Byju’s will fund the Aakash deal with cash from previous and future fund-raising rounds, Chaudhry said.
“Test-prep especially on the offline side has been a very different area for Byju’s,” Chaudhry said. “Like WhiteHat Jr and Osmo, we will also operate separately and independently, post acquisition. I will run test prep for Think and Learn Private Ltd, the parent company of Byju’s,” he said.
Chaudhury said the company will launch new types of centres that are partially online and offline, where teachers don’t have to be present physically. AESL had filed for a public listing in 2018 but had to shelve the IPO after the IL&FS crisis later that year.
‘Best of online, offline’
Byju Raveendran, Founder, and CEO, Byju’s, said, “Our complementary strengths will enable us to build capabilities, create engaging and personalised learning programmes. The future of learning is hybrid and this union will bring together the best of offline and online learning,” he said.
Amit Dixit, Co-Head of Asia Acquisitions and Head of India Private Equity at Blackstone, said: “We invested in AESL because it is one of the leading education brands in India with a professional management team. We have always believed omnichannel will be the winning model in test prep and tutoring.”
With over 215 centres, Aakash provides preparatory services to students appearing for medical and engineering entrance exams, school/board exams, KVPY, NTSE, Olympiads, and other foundation level exams.
EY was the exclusive financial advisor for Byju’s on this transaction, and Phoenix Advisors for AESL.
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