Snapdeal close to acquiring ShopClues in an all-stock deal

by Apparel Resources News-Desk

22-May-2019  |  2 mins read

Snapdeal
Image Courtesy: moneycontrol.com

E-commerce platform Snapdeal is close to buying out rival ShopClues in an all-stock deal, two people familiar with the matter said. The due diligence for the acquisition started a few weeks ago and a final decision is still awaited. The on-again off-again talks fell through earlier following disagreement on its financial terms.

Also, Snapdeal is reportedly looking to raise fund at a valuation of about US $ 2 billion, which could be supported by the acquisition.

The deal will help Snapdeal make a strong comeback and give stiff competition to rivals like Walmart-owned Flipkart and Amazon.

If finalised, the proposed deal may see ShopClues investors get one Snapdeal share for every nine they hold and may provide them a 10 per cent stake in the combined entity.

“The ask from ShopClues is to get at least a 30 per cent stake in Snapdeal as a part of the transaction,” one of the persons informed. Another person familiar with the matter said that the management and founders, Radhika Aggarwal and Sanjay Sethi, are likely to get a small cash exit.

The deal is expected to be a 100 per cent buyout wherein all of ShopClues’ investors, including Singapore’s sovereign wealth fund GIC, Helion Venture Partners, Tiger Global, Nexus Venture Partners and Unilazer Ventures, will roll into Snapdeal.

Clues Network, which manages ShopClues, has so far raised US $ 250 million and its business declined in the past year, pushing it to the number five slot on the gross merchandise value.

ShopClues’ web and mobile web traffic dropped to 11 million in April from 16 million in November 2018, mentioned a report. However, ShopClues has trimmed losses from Rs. 210 crore in 2017-18 to less than Rs. 45 crore in 2018-19.

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