SUMMARY
- Paytm has concluded definitive agreements for the sale of its entertainment ticketing operations, including movie, sports, and live event ticketing, to Zomato for Rs 2,048 crore.
- This acquisition is anticipated to result in OTPL and WEPL becoming wholly-owned subsidiaries of Zomato.
- The acquisition price for OTPL is projected to be ₹1,264.6 crore, while the acquisition price for WEPL is estimated at ₹783.8 crore, as per the filing.
Paytm has concluded definitive agreements for the sale of its entertainment ticketing operations, including movie, sports, and live event (including live performances) ticketing, to Zomato for Rs 2,048 crore. As a result of this transaction, a total of 280 employees from Paytm will transition to Zomato.
One 97 Communications is set to divest its movie ticketing operations to its wholly-owned subsidiary OTPL, alongside its sports and events ticketing business, which will be transferred to another wholly-owned subsidiary, WEPL, via a slump sale.
Zomato intends to acquire the entirety of OCL’s equity interests in both OTPL and WEPL, through a share purchase agreement. This acquisition is anticipated to result in OTPL and WEPL becoming wholly-owned subsidiaries of Zomato.
The acquisition price for OTPL is projected to be ₹1,264.6 crore, while the acquisition price for WEPL is estimated at ₹783.8 crore, as per the filing. Zomato has disclosed that it expects the acquisition process to be finalized within a period of 90 days.
During a transition period spanning up to 12 months, the availability of movie and event tickets on the Paytm application, as well as on the TicketNew and Insider platforms, will be maintained, ensuring a seamless and uninterrupted experience for both users and merchant partners, as stated by Paytm. The transaction is anticipated to be finalized within the current quarter, provided all necessary conditions for completion are satisfied.
Paytm has stated, “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 previously acquired TicketNew and Insider for a total consideration of Rs 268 crore between 2017 and 2018, subsequently investing further to expand the business. In FY24, the entertainment ticketing division reported revenues of Rs 297 crore and an adjusted EBITDA of Rs 29 crore. Zomato is acquiring this division at a valuation of 1 times the trailing enterprise value/FY24 gross operating value (GOV) multiple, which it deems to be equitable in comparison to the valuations of other similar entities.
In FY24, the division achieved a combined gross merchandise value (GOV) of Rs 2,000 crore, marking a 29% YoY increase, through the facilitation of 78 million ticket purchases by 10 million unique customers.
Zomato said, “This is not really an absolutely new business for us as we have already been doing ticketing as a business for more than a year now and have been eyeing building more use-cases for that business. Just to recap, our going-out business (which includes dining-out and event ticketing) did Rs 3,225 crore of GOV in FY24 growing at 136% YoY. It never gets spoken about much given all the attention food delivery and quick commerce get but this is already a profitable and large business for us.”
Zomato also announced its intention to launch a new app, District, in the forthcoming weeks.
