 "Snapdeal-GoJavas deal falls apart: Sources")
According to sources, online marketplace giant Snapdeal and logistics firm GoJavas were in discussions of a complete buyout of the logistics firm, but the talks ended on Friday morning as differences cropped up over valuation.
“There were disagreements over the valuation at which Snapdeal wanted to acquire GoJavas. The logistics company was not happy with the way talks were panning out as some terms and conditions set by the online marketplace player were not agreeable to the founders of the company... They decided to walk out of the deal,” said sources close to GoJavas.
Sources also said that GoJavas is now looking at all options including buying out the 42 per cent stake Snapdeal has in the company. “This is a possibility. There might be a possible buyout from Snapdeal. However, for now, they remain one of the customers of the company,” sources added.
According to company insiders, while the valuation of GoJavas last year when Snapdeal picked up stake was around Rs 600 crore. The valuation has now come down to Rs 400-500 crore.
“Snapdeal wanted to buy out at a price that is much lesser than the present valuation and that is why the deal fell through,” added the source.
Snapdeal in October had put in Rs 117 crore into GoJavas last year, making it the biggest shareholder in the company with 42 per cent stake. Before that, Snapdeal had bought a 20 per cent stake in GoJavas for Rs 120 crore.
GoJavas was founded in 2013 and has clients such as Jabong, Fabfurnish, Lenskart and Healthkart. In April this year, it named former executive of ITC Ltd Amitabh Coomar as its new chief executive officer after Vijay Ghadge’s departure.
Recently, there were reports that Snapdeal would complete the acquisition through its captive logistics company Vulcan Express, which provides end-to-end logistics solutions to the marketplace's delivery centres. Ghadge, the former chief operating officer at Go-Javas, has now joined Vulcan Express as its COO.
According to sources, GoJavas will now start looking for other investors and try to buy out Snapdeal’s stake in the next few weeks. The company is also planning to get into other non-e-commerce related activities and soon roll out a strategy around that. “The company is looking at non e-commerce sectors such as banking & financial and telecom. Soon, they would be branching out into other areas as well,” said a source.
