Network18 is exiting from NewsWire18, selling its entire 77.5% stake to private equity firm Samara Capital for Rs 90 crore. Earlier, it was in talks with Thompson Reuters for a possible stake sell but deal didn't go through. Pankaj Aher, founding CEO of Newswire18, spoke to Gaurav Laghate, on what the deal means for Newswire18 and the expansion plans.
What do you think has made Samara Capital invest in the company?
We are extremely interested in expanding our business and that's what made Samara Capital acquire the majority stake. They have seen our roadmap for next five years and are extremely comfortable in it. They have also agreed to invest for any future expansion plan.
So what does this deal means to you?
We are a profit making company with a negligible debt. Last fiscal, our topline was Rs 45 crore with an EBITDA of over Rs 7 crore. For the first six-months of this fiscal we have Rs 24 crore topline and EBITDA of Rs 5 crore. We will end this fiscal with Rs 50 crore in revenue and Rs 11 crore EBITDA.
Now, we want to grow our business. Existing promoters, Network18 was looking at exiting non-core businesses so there was uncertainty. This deal ends that uncertainty and gives us that financial confidence to grow the business.
What is your additional fund requirement?
We do not have any fund requirement for our organic domestic business. We may need funds if we take up large projects. The main need will be when we decide to expand in the international markets.
So expansion in the international markets is on cards?
The news terminal business is a $20 billion global industry, which is mainly serviced by two players – Bloomberg and Reuters. But they have products which are like 'fit-for-all' clients. When we decided and transitioned into Newswire18, our specific aim was to fill up the gap and provide relevant information to our clients.
We definitely have plan to enter in many other countries. How we go about it, will it be simultaneous in many countries or phase-wise, that will be decided later. But what is heartening is that Samara has agreed to to help with the future cash flows.
What is your current headcount and are you looking at hiring more people?
In the last 12-18 months, we have lost many people from our editorial as well as ad sales team. We have started hiring again. At present, out of 250 people team, we have around 60 in editorial, which we intend to increase up to 90.
Additionally, we have to beef up our ad sales team to improve revenue.
