Nazara Technologies Wins Approval to Acquire Smaaash Entertainment

Nazara Technologies Ltd saw a notable gain in its share price on Thursday, August 8, following the company’s announcement of receiving a letter of intent (LOI) for the acquisition of Smaaash Entertainment, which is currently undergoing an insolvency process.

Approval from Committee of Creditors

In a significant development, Nazara Technologies disclosed in a stock exchange filing that the Committee of Creditors of Smaaash Entertainment Private Limited had approved the resolution plan submitted by Nazara Technologies. This plan is part of the ongoing Corporate Insolvency Resolution Process (CIRP). The company’s successful bid marks a pivotal step in its growth strategy.

Official Declaration and Market Reaction

Nazara Technologies received the LOI from the resolution professional of Smaaash Entertainment on August 7, formally designating it as the successful resolution applicant. This news propelled the shares of Nazara Technologies, which rose by 5%, reaching a peak of Rs 957.65 per share on the NSE.

Regulatory Approvals Pending

While the approval is a positive step, the acquisition is subject to the terms outlined in the letter and requires requisite approvals from the National Company Law Tribunal (NCLT) and other regulatory authorities. These steps are essential to finalize the acquisition process and integrate Smaaash Entertainment into Nazara’s portfolio.

Expansion in the Gaming Sector

In a related development, on August 6, Nazara Technologies announced that its subsidiary, Absolute Tech, had acquired the assets of DeltiasGaming.com. This strategic acquisition aims to deepen the subsidiary’s presence in the US gaming content publishing sector. The asset purchase agreement was signed for an all-cash consideration of $900,000 (approximately ₹7.5 crore), payable in one or more tranches, with the transaction expected to close within the next 45 days.

Leveraging New Assets

DeltiasGaming.com reported revenues of $575,000 (approximately ₹4.8 crore) for the twelve months ending June 2024. Absolute Sports plans to leverage Deltias’ substantial user base of nearly 1.5 million monthly readers and its brand equity. Additionally, the acquisition will provide access to Deltia’s audience on YouTube and Twitch, enhancing Absolute Sports’ digital footprint and engagement with gaming enthusiasts.

Stock Performance

On the back of these strategic moves, Nazara Technologies Ltd shares were trading higher by 5% on Thursday. The stock has demonstrated impressive performance in 2024, delivering double-digit returns to its investors, reflecting strong market confidence in the company’s growth prospects.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.