A big deal is going to happen between online food delivery platform Zomato and Paytm. For this, Zomato will pay Rs 2048 crore to the troubled fintech firm Paytm. Actually, Zomato is going to acquire Paytm’s entertainment ticketing business to strengthen its ‘going-out’ segment.
One97 Communications Limited (OCL), the company that operates Paytm, announced on Wednesday that it is going to sell its movie and event ticketing business to Zomato for Rs 2,048 crore. The boards of directors of both the companies have approved this cash deal.
Under this deal, OCL’s entertainment ticketing business will transfer the business to its 100 percent subsidiaries Orbgen Technologies Private Limited (OTPL) and Westland Entertainment Private Limited (WEPL). After this, 100 percent stake in these subsidiaries (which operate TicketNew and Insider platforms) will be sold to Zomato. After this, Zomato will convert this new business into a new app called ‘District’.
Under the deal, Zomato will fully acquire Orbgen Technologies Pvt Ltd (OTPL), which is into movie ticketing, for Rs 1,264.6 crore and Westland Entertainment Pvt Ltd, which is into event ticketing, for Rs 783.8 crore.
According to PTI, the combined entertainment ticketing business has a revenue of Rs 297 crore and adjusted EBITDA of Rs 29 crore in FY24. OCL said in a statement, “This transfer will also include about 280 existing employees of the entertainment ticketing business. Paytm will benefit significantly from this transaction and the cash proceeds will further strengthen the balance sheet.”
Announcing this business deal, Paytm said that this will help the fintech to focus on core payments and financial service delivery. A Paytm spokesperson said, “This move will enable us to continue to focus on long-term growth in our core areas and value creation for all stakeholders.”
On the other hand, Zomato Managing Director and CEO Deepinder Goyal said in a letter to shareholders, “The proposed acquisition will help us connect our customers in this segment at a greater scale and provide new use-cases (such as movie and sports ticketing).
Zomato believes the deal makes it more relevant to its customers and gives the business an opportunity to transform into a new app. “We are going to call it District, which can be a game changer for each of these use cases given the need for a single brand as a destination in this segment,” Goyal said.
He said that Zomato wants to establish ‘District’ as such a brand that when users think of going out somewhere, this is the app that comes to their mind.
OTPL was incorporated in India on November 23, 2007. It is in the business of listing and selling movie tickets and other services. Its turnover was Rs 13.14 crore in the financial year ended March 31, 2024. Whereas WEPL was incorporated on December 21, 2015. It is in the business of listing and selling event tickets and other services. Its turnover was Rs 236.03 crore in FY 24.
Paytm said the move to sell its entertainment ticketing business underlines its core focus on payments and financial services delivery. “In recent quarters, the company has also expanded its offerings in insurance, equity broking and wealth distribution, with significant opportunity to cross-sell these services and grow its market presence as a leading financial services delivery player,” Paytm said.
During the transition period (up to 12 months), movie and event tickets will be available on the Paytm app as well as the TicketNew and Insider platforms, ensuring a seamless and seamless experience for users and merchant partners. Paytm said the deal underlines its success in building businesses and creating value for shareholders.
Zomato’s Goyal said the District app is expected to launch anytime in the next few weeks. Post this acquisition, he said Zomato’s going-out business will be spread across multiple platforms. Its existing going-out business (dining-out + event ticketing) will continue to run on the Zomato app and the acquired business – movie, sports and event ticketing – will continue to run on Paytm’s main app along with the Insider and TicketNew apps for a transition period of up to 12 months. Both of these will be transferred to Zomato as part of the transaction.
Source (PTI) (NDTV) (HINDUSTANTIMES)