BENGALURU: Edtech firm Byju’s parent Think and Learn has reportedly sent a legal notice to tuition chain Aakash Educational Services’ founders due to their alleged resistance to complete a share swap.
According to reports, private equity firm Blackstone and the Chaudhry family (both minority shareholders) have declined to swap their equity holding in Aakash with Think and Learn.
Byju’s acquired Aakash for about $950 million in a cash and stock deal in 2021. Recently, two independent directors of Aakash Educational Services have resigned from the board. When asked about the legal notice, Byju’s declined to comment.
While Byju Raveendran owns 27% in Aakash, Think & Learn owns 43% and the rest has been owned collectively by Chaudhry and Blackstone. It is said that the share swap was an integral part of the acquisition agreement. Meanwhile, various reports said that Manipal Group’s chairman Ranjan Pai is in talks to buy a stake in Aakash. This will be a part of the equity round that edtech firm Byju’s has been planning to raise.
In case, if Pai invests in Aakash, this will be crucial for the edtech firm as it is in a legal tussle with its lenders over $1.2 billion term loan B. Recently, Byju’s said Aakash’s revenue is on track to reach `4,000 crore. In June this year, the edtech major announced that it will launch the IPO of Aakash mid next year.
The upcoming IPO will provide a significant capital infusion to bolster Aakash’s infrastructure, broaden its reach, and extend high-quality test-prep education to a larger number of students across the nation, Byju’s said.Since acquisition, Aakash has clocked a three-fold increase in revenue in the last two years. Aakash, the 35-year-old company, is one of the most successful test prep companies for engineering and medical entrance exams, with over 325 centres currently serving more than 400,000 students across the country.