Deals
Dentsu Aegis acquires SVG Media in all-cash deal
Dentsu Aegis Network (DAN), a global digital marketing major headquartered in London, UK, has acquired Indian marketing services group SVG Media Pvt. Ltd in an all-cash deal, the two companies announced Tuesday.
While both firms declined to comment on the deal size, two people privy to the development said it was in the range $100-120 million. Smile Group owns majority stake in SVG Media, which counts Xplorer Capital as an institutional backer.
SVG Media was founded in 2006 as a business owned by Smile Group, that runs a slew of e-commerce and internet businesses. SVG Media has four business units, namely DGM (focussed on banking, financial service and e-commerce clients), Komli (premium digital marketing through Facebook and Twitter), SeventyNine (mobile-focussed advertising platform) and Tyroo (ad-tech platform similar to InMobi), together reaching over 150 million unique viewers in India. It has offices in Gurgaon, Mumbai, Chennai and Bengaluru.
As part of the deal, Smile Group, promoted by media entrepreneurs Manish Vij and Harish Bahl, has sold DGM, Komli and SeventyNine (under SVG Media) to DAN. Tyroo, which is retained, is transferred to a separate legal entity and will continue to be owned by Smile Group.
SVG Media had acquired Komli Media and SeventyNine in August 2015 and December 2014, respectively, and DGM in 2010.
As per the deal, DAN will take control of the offices and about 280 specialists housed in the three units. Anurag Gupta, the chief executive officer of DAN, will take over as CEO of SVG Media replacing Bahl and Vij, the outgoing chairman and CEO, respectively. Gupta will report to Ashish Bhasin, chairman and CEO of DAN South Asia.
Business vertical heads Chirag Shah and Deven Dharamdasani from SeventyNine, Akshay Mathur from Komli and Ashwani Mehta will join the board at SVG Media.
According to Vij, SVG Media, including all its business, generated operating profit of Rs14 crore on revenue of Rs200 crore in the year ending March 2016. Post the acquisition, Smile Group will focus on growing Tyroo and continue to invest in and incubate media start-ups, he added.
This marks the second successful exit by Vij and Bahl in the digital media space, after having sold ad firm Quasar Media to WPP Digital in 2007. Separately, Letsbuy, an electronics retail venture e-commerce platform setup by Vij, was sold to Flipkart for $25 million in 2012.
“At Smile we are proud to have continuously built successful JV (joint venture) partnerships or exits with large global firms as Airbnb, Yahoo, WPP Digital, Scan Group-Africa etc. SVG’s market leadership and exit to DAN is another feather in the cap for Smile,” Smile Group’s Bahl said.
For DAN this comes as their 10th acquisition in India since 2012, according to data shared by the company. Some of these include Fractal Ink Design Studio, Happy Creative, WATConsult, Webchutney and Taproot. Just recently, it closed the acquisition of Grant Group, a 59-year old family run advertising services company in Sir Lanka, Mint reported in March.
“India is a significant market with rapid growth potential in its mobile and performance marketing business, and Dentsu Aegis Network India has a strong track record in the search and performance space to deliver this,” DAN’s Bhasin said in a statement.
DAN was formed in 2012 through the acquisition of Japanese advertising giant Dentsu by British media buying Aegis Media in 2012.
Part of Dentsu Inc., DAN is made up of 10 global network brands: Carat, Dentsu, Dentsu media, iProspect, Isobar, mcgarrybowen, Merkle, MKTG, Posterscope and Vizeum. Headquartered in London, it operates in 145 countries worldwide with more than 38,000 dedicated specialists.
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