One 97 Communications Limited (OCL), which owns the brand Paytm, today announced that it has entered into definitive agreements for the sale of its entertainment ticketing business that includes movies, sports and events (live performances) ticketing to Zomato Limited.
The deal, valued at Rs 2,048 crores on a cash-free, debt-free basis, stands "as a testament to the value" Paytm has created through its entertainment ticketing business, bringing choice and convenience to millions of Indians with its services and scale, the company said in a release filed with exchanges.
As part of this agreement, OCL will transfer its entertainment ticketing business to Zomato by transfer of OCL's entertainment ticketing business to it's 100% subsidiaries, Orbgen Technologies Pvt Limited (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL) and selling 100% stake in its subsidiaries OTPL and WEPL, which operate the TicketNew and Insider platforms, respectively to Zomato.
The release said that transfer will also include 280 existing employees from the entertainment ticketing business.
"The transaction value is subject to cash and net working capital adjustments at closing. Transaction closure is subject to satisfaction of agreed conditions precedent," the release said.
It said Paytm's move to sell its entertainment ticketing business underscores its core focus on payments and financial services distribution.
"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 distribution player," the release said
During a transition period (up to 12 months), the movie and event tickets will continue to be available on the Paytm app, as well as on the TicketNew and Insider platforms, ensuring a smooth and uninterrupted experience for users and merchant partners.
The release said that Paytm built movie ticketing from the ground up, and acquired TicketNew and Insider for total consideration of Rs 268 crores from 2017 to 2018. Further, additional investments were also made to scale up the business.
The release said with a strong focus on long-term value creation, the company remains confident in substituting revenue from its entertainment ticketing business by expanding core business areas of payments and financial service distribution.
Paytm spokesperson said the company built the entertainment ticketing business by addressing the market needs of the time.
"Today, as it transitions to Zomato ownership, we thank every team member who contributed to building this business. It has been a privilege to grow this business with an incredible team. This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders."
Deloitte Touche Tohmatsu India LLP provided transaction advisory and valuation, while Morgan Stanley assisted Paytm with fairness opinion on the transaction. Luthra & Luthra acted as legal counsel to Paytm on the transaction.
The transaction is expected to close within this quarter, subject to the satisfactory completion of all closing conditions. (ANI)
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