Network18 Media & Investments has sold its 70.06 per cent stake in Webchutney to Dentsu. It had acquired this in November 2007. While Dentsu and Network18 did not disclose the terms of the deal, the latter issued a statement saying the investment had generated a return of “over 300 per cent”.
“This is in line with the stated objective of profitably monetising investments to create value for the shareholders of Network18,” it said. Bryan, Garnier & Co was the sole advisor to the divesting shareholders. This is the second big acquisition by Dentsu in India. In August 2012, it had acquired a 51 per cent stake in Taproot India.
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Webchutney was founded by Sidharth Rao and Sudesh Samaria in 1999 and has around 200 employees across offices in Delhi, Mumbai and Bangalore. Its clients include Airtel, Unilever, MasterCard and Coca-Cola.
Webchutney’s services span web design, social media, mobile and experiential digital advertising. Dentsu said the agency would continue to operate independently, under the management control of its current leadership.
Rohit Ohri, executive chairman, Dentsu India Group, said, “Dentsu is the first global network that’s being built out in the post-digital era. ... we’re building the network of the future... the partnership with Webchutney is another step in the direction.”
Dentsu had launched operations in India in October 2003, in a joint venture with Sandeep Goyal’s Mogae Group. In 2011, Dentsu bought out Goyal’s stake and took full control of the Dentsu India Group comprising three independent, full-service advertising agencies (Dentsu Communications, Dentsu Marcom and Dentsu Creative Impact); a media arm, Dentsu Media; Dentsu Digital, a digital agency; and Taproot India.
Network18 strategy
The Raghav Bahl-promoted Network18 is continuing a strategy of divesting stake in non-core businesses and monetising of investments. During FY13, the company divested its search businesses, Infomedia Yellow Pages and AskMe, to Getit Infoservices. It sold its entire stake in Newswire18 (77.5 per cent) to private equity firm Samara Capital for Rs 90 crore.
It also diluted its majority stake in BookMyShow (India) and sold its stake in one of the Capital18 investee companies, NetworkPlay.
These transactions added Rs 180 crore to the year’s profit and raised Rs 235 crore for the Network18 Group.
Bahl, managing director of Network18, said, “The divestiture of Webchutney is a reflection of our commitment to profitably monetise our investment portfolio for the benefit of our shareholders and to also facilitate the growth of these businesses to the next level. We would like to convey our best wishes to the Webchutney team as they embark on the next phase of their journey.”
SHIFTING FOCUS
- Network18 has sold its 70.06% stake in Webchutney to Dentsu at a return of “over 300%”
- In FY13, Network18 sold its search businesses, Infomedia Yellow Pages and AskMe, to Getit Infoservices. It sold its entire stake in Newswire18 (77.5%) to PE firm Samara Capital for Rs 90 crore. It also diluted its majority stake in BookMyShow (India) and sold its stake in one of the Capital18 investee companies, NetworkPlay
- These transactions added Rs 180 crore to the annual profit of the company and raised Rs 235 crore for the Network18 Group