Music label company Saregama is all set to acquire a 51.82% stake in the digital entertainment startup Pocket Aces for Rs 174 crore or $20 million.
The board at Saregama has passed a resolution to acquire 6,60,650 shares of Pocket Aces in two tranches, regulatory filing sourced from the National Stock Exchange shows. These shares will be acquired through a secondary route.
Saregama is also investing Rs 15 crore worth of primary shares.
The company plans to purchase a 92.61% stake from Pocket Aces which includes both tranches and the primary issue of shares. According to the filing, the acquisition of 52% of shares will materialize within 2 months while the remaining ownership will be acquired within 18 months.
As per data intelligence platform TheKredible, Peak XV is the largest external stakeholder in the company with 26.2% while the three co-founders Anirudh Pandita, Ashwin Suresh, and Aditi Shrivastava jointly hold 34.21%.
A decade-old Pocket Aces creates and distributes engaging original content for millennial audiences through its three main content channels which include Dice Media (premium long-form web series), Filter Copy (short-form content) and Gobble (short-form food videos).
The acquisition will provide Saregama with a vast IP and a distribution network of more than 95 million followers, the company stated in the filings. The acquisition will create synergies in artist and influencer management, as well as long-format video production between the two companies, as per Saregama.
As per filings, Pocket Aces registered Rs 104.39 crore in operating revenue in FY23. This is a minor jump from Rs 97.34 crore revenue in FY22 during which its losses stood at Rs 5.98 crore. The company did not disclose further details of FY23.
Pocket Aces has raised over $20 million to date with the likes of Peak XV Partners (former Sequoia), 3one Capital, DSP Mutual Fund, and others.
Like many growth and late stage companies, Pocket Aces also went through layoffs and fired one-fourth of its workforce, or 50 employees in February this year.