Byju’s proposes $1B 2U acquisition; seeks business expansion into the US

By Pranali Mehta  | Date: 2022-06-30

Byju’s proposes $1B 2U acquisition; seeks business expansion into the US

Byju’s, an India based online education provider, has proposed an offer to purchase 2U Inc. in a cash deal worth $1 billion.

As per sources, Byju’s offered $15 per share to 2U’s board the previous week. The proposal represents a premium of 61% to 2U’s closing price of $9.30 on the Nasdaq and provides Lanham, Maryland-centric firm an enterprise value of nearly $2 billion.

Reportedly, Byju’s is one of the most valuable start-ups internationally with support from Chan Zuckerberg Initiative by Mark Zuckerberg and Tiger Global Management. In fact, the firm is speeding up its growth internationally via acquisitions.

It has been claimed that Byju’s was most likely to bid for Chegg Inc. or 2U in May this year. However, talks with Santa Clara, California-centric Chegg have not progressed yet.

According to credible reports, it is still possible that the deal with 2U might not materialize if the board declines the proposal. The present market value of 2U is about $717 million and nearly $1 billion in debts and other liabilities.

Apparently, Byju’s has secured a capital of over $2.4 billion for the deal it will eventually pursue as it aims to step up its global expansion and growth. Meanwhile, debt financing is relatively more expensive than it was three months prior, but the assets are less expensive, and deals are still attractive.

Notably, Byju’s is pushing back payments for $1 billion acquisition of Aakash Educational Services, a test-preparation provider.

Byju’s has requested to delay the payments till late August as regulators are yet to clear the acquisition and sources claim that it has nothing to do with money shortage. Shareholders of Aakash have given a green signal to the extension.  

As per reports, shares of 2U have drastically declined over 80 per cent since being at $55.55 in early 2021.

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Pranali Mehta

Pranali Mehta

A chemical engineer by qualification, Pranali Mehta has dutifully walked down the slated path and worked in the chemicals industry for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience...

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