Zomato is set to acquire Paytm’s entertainment and ticketing business for 2,048.4 crore or $244 million, as the food delivery giant aims to strengthen its presence in the “going-out” sector. Meanwhile, Paytm, facing challenges, intends to concentrate on its core financial services.
Both companies’ boards approved the cash transaction on August 21, as disclosed to the exchanges.
Under the agreement, One 97 Communications will transfer its movie ticketing business to its wholly-owned subsidiary OTPL and its sports and events ticketing business to another wholly-owned subsidiary, WEPL, through a slump sale.
Paytm, which has been BookMyShow’s main competitor since 2017, is set to transfer its market share to Zomato by selling its ‘TicketNew’ platform, which focuses on movie ticket sales, and its ‘Insider’ platform, which manages tickets for live events.
Paytm developed its movie ticketing business internally and acquired Insider and TicketNew for 2.68 billion rupees between 2017 and 2018.
Zomato plans to acquire OCL’s entire stake in OTPL and WEPL through a share purchase agreement, making both OTPL and WEPL wholly-owned subsidiaries of the food delivery company.
Additionally, Zomato will conduct a primary infusion into OTPL and WEPL through a preferential allotment, matching the amount of the slump sale consideration. This infusion will be used to settle the amount payable to OCL for the slump sale.
The acquisition cost for OTPL is estimated at 1,264.6 crore, while for WEPL, it is 783.8 crore, according to the filing. Zomato has indicated that the acquisition is expected to be completed within 90 days.
OTPL, established on November 23, 2007, in India, specializes in listing and selling movie tickets, along with other services. WEPL, incorporated on December 21, 2015, in India, focuses on listing and selling event tickets and additional services.
As of March 31, 2024, the audited turnover for OTPL was 13.14 crore, while WEPL reported a turnover of 236.03 crores.
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