Dentsu acquires 80 per cent stake in Webchutney and will pick up remaining stake by 2017 under the terms of the agreement
BestMediaInfo Bureau | Delhi | May 23, 2013
Network18 Media & Investments Ltd (Network18) has announced that its venture capital arm, Capital18, has entered into an agreement with Dentsu India Group to divest its stake in Webchutney, one of India’s leading digital agencies. As a result of the agreement, Dentsu Media & Holdings India Pvt. Ltd. has acquired 80 per cent stake in Webchutney Studio Private Limited. Under the terms of the agreement, the company will become a wholly owned subsidiary of Dentsu Media & Holdings India Pvt. Ltd. by 2017.
The investment has generated a return of over 300 per cent for Capital18.
Commenting on the transaction, Raghav Bahl, Managing Director, Network18, said, “The divestiture of Webchutney is a reflection of our commitment to profitably monetise our investment portfolio for the benefit of our shareholders and to also facilitate the growth of these businesses to the next level. We would like to convey our best wishes to the Webchutney team as they embark on the next phase of their journey.”
With around 200 employees across offices in Delhi, Mumbai and Bengaluru, Webchutney has been credited with developing award winning and memorable digital experiences for some of the biggest brands in the country, many of them of global repute like Airtel, Unilever, MasterCard, Coca-Cola, Bacardi Martini, Budweiser, ITC, Marico, Madura Garments, Titan, Bajaj, Reliance Retail and Saint Gobain.
The work done by the agency has been awarded at various domestic and international events over the years including Adfest, Goa Fest (Creative Abbys), Yahoo! Big Idea Chair Awards, Campaign India Digital Media Awards, IAMAI Indian Digital Awards, W3 Awards and Olive Crown Awards among other prominent recognitions.
Founded by Sidharth Rao and Sudesh Samaria in 1999, Webchutney boasts an impressive client roster and some of the most recognized digital work over the last few years spanning web design, social media, mobile and experiential digital advertising. Rahul Nanda, President, Mobile Initiatives, joined the agency in 2005 as Partner and Chief Operating Officer. The agency will continue to operate independently under the management control of its current leadership.
Sidharth Rao, Chief Executive Officer and Co-founder, Webchutney, commented, “In Dentsu and Rohit Ohri, we have found a partner who is willing to invest in and cultivate our passion to provide path breaking digital creative services to our clients. We are thrilled to be working with such a strong global leadership and are ready to enter a new phase of our growth. We could not have made it this far without the unfaltering support of our clients, our leadership teams and the talented bunch of team members. I am also personally grateful to Sarbvir Singh who has been my mentor for the last five years and his team at Capital18 for ensuring that we shared a wonderful journey together.”
Sudesh Samaria, National Creative Director and Co-founder, Webchutney, said, “The Dentsu network is ‘future obsessed’ and that fits in perfectly with what we do here at Webchutney. We’re always trying to be ahead of the curve and we love people, ideas and technology that will help us and our clients get there faster. So in that sense both from a philosophy point of view as well as synergies across capabilities, we believe we’ve found the ideal growth partner in Dentsu.”
Speaking on the new partnership that strengthens the Dentsu India Group’s digital offerings and will expand its footprint in the space, Rohit Ohri, Executive Chairman, Dentsu India Group, said, “Dentsu is the first global network that’s being built out in the post-digital era. We believe we’re building the network of the future. Our partnership with Webchutney is another step in that direction. We’re now going to be able to put world class digital solutions in the centre of our offering to our clients. I’m delighted to have Webchutney, India’s No. 1 digital agency, as a part of the Dentsu India Group.”
In August 2012 Dentsu acquired Taproot, a leading creative agency with an impressive roster of blue-chip clients that include major companies in India as well as multinational companies. Since Webchutney also has many prominent local and global brands as key clients, its addition to the Dentsu India Group will further expand the Group’s client base.
Through effective use of Webchutney’s strengths in digital strategic planning and innovative ideas to provide outstanding digital creative solutions, the Dentsu India Group aims to attract long-tail clients, a fast-growing client group in India and neighboring countries.
The provision of high-quality solutions to clients through collaboration of the diverse capabilities of all the Dentsu India Group companies is expected to contribute to the enhancement of the value of the Dentsu brand.
The impact of this transaction on Dentsu’s consolidated financial results for the fiscal year ending March 31, 2014 is expected to be minimal.
Bryan, Garnier & Co. acted as the sole advisor to Capital18 and other selling shareholders.