Nazara Technologies entered into an agreement to acquire a 55% stake in programmatic advertising and monetization company, Datawrkz worth upto Rs 124 crore, valuing the company at Rs 225 crore (approx. $30 million) linked to CY22 EBITDA performance.
Nazara Technologies will acquire a 33% stake (Rs 60 crore payable of which Rs 35 crore is partly payable in cash and the balance consideration of Rs 25 crore will be paid either in cash or swap of shares) in the first tranche by 22 April 2022. The gaming company reserves an option to acquire an additional 22% in the second tranche that is expected to close in Q4 FY23.
Datawrkz, founded in 2013 by Senthil Govindan, an IIM Ahmedabad alumnus, is a global advertising technology firm focused on accelerating user and revenue growth for clients through highly optimized digital advertising. With offices in the US, Singapore, and India, the firm functions as an Independent Trading Desk to power digital media strategy, planning and execution. Datawrkz's self-serve product suite for advertisers - Vizibl, includes a Demand Side Platform as well as a Customer Data Platform.
On the supply side, Datawrkz generates higher revenue for publishers through AdPrimus, its supply side product set that drives higher user engagement, mediates between demand sources, and enables audience segmentation. For the calendar year 2021, Datawrkz posted a combined revenue of Rs 90.7 crore (approx. $12.1 million) and EBIDTA margin of 12% with around 70% of its revenue coming from the US as per CY 2021 unaudited financial statements.
Datawrkz tech offerings will enhance in-house capabilities of Nazara Technologies for optimizing its customer acquisition spends as well as enhance yields on ad monetization of its large consumer base. This ad-revenue monetization is expected to assist many of the companies in the 'Friends of Nazara' network. Further, there is an increasing symbiotic relationship between gaming companies and ad tech companies worldwide as a combination of the two will be value accretive for both businesses. With this transaction, Datawrkz aims to establish itself as a key player in gaming, covering both demand and supply side offerings for the gaming ecosystem in the US and India.
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Meanwhile, on 17 January 2022, the board of Nazara Technologies approved increasing the limits for the company to provide loan, guarantee to any person or body corporate or make investment in any body corporate under Section 186 of the Companies Act, 2013 from Rs 550 crore to Rs 1000 crore, subject to the approval of the shareholders of the company.
Nazara Technologies' consolidated net profit rose 9.8% to Rs 14.50 crore on a 17.8% surge in net sales to Rs 129.60 crore in Q2 September 2021 over Q2 September 2020.
Shares of Nazara Technologies lost 0.99% to Rs 2,427 on BSE. Nazara Technologies is one of the leading mobile games companies. It is India's leading diversified gaming and sports media platform with a presence across emerging and developed global markets such as Africa and North America, with offerings across the interactive gaming, eSports, and gamified early learning ecosystems.
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