Praveg Ltd to Increase Presence in Advertising Industry: Signed Agreement for Acquisition

Praveg Ltd, a company focused on providing services to the Hospitality sector, announced a strategic move to bolster its presence in the advertising sector. The Board of Directors has approved the execution of a Share Purchase and Share Subscription Agreement for the acquisition of a 51% majority stake in Abhik Advertising Private Limited and Bidhan Advertising and Marketing Private Limited.

Enhancing Capabilities and Revenue Streams

Through this acquisition, Praveg aims to capitalise on the burgeoning advertising market. The strategic move will amplify their innovative capabilities within the advertising landscape and accelerate revenue growth. Projections indicate a significant increase, reaching ₹40 crores in FY25 and ₹45 crores in FY26. Furthermore, Praveg anticipates promising EBITDA margins in the range of 35% to 40%.

Acquisition Details and Impact

• Acquisition Structure: Praveg will acquire a 51% stake in both Abhik Advertising and Bidhan Advertising by purchasing existing equity shares and issuing preferential equity shares.
• Subsidiary Status: Following the acquisition, both Abhik Advertising and Bidhan Advertising will become subsidiaries of Praveg Ltd.
• Completion Timeline: The acquisition is expected to be finalised on or before September 30, 2024.
• Consideration: The purchase will be settled in cash, potentially divided into multiple tranches.

Breakup of Consideration

Abhik Advertising

Purchase of existing shares: 4,468 shares at a fair value of ₹11,190.70 per share, totalling approximately ₹5,00,00,048.

Issuance of preferential shares: 11,698 shares at a fair value of ₹11,190.70 per share, totalling approximately ₹13,09,08,809.

Bidhan Advertising

Issuance of preferential shares: 1,04,076 shares at a fair value of ₹392 per share, totalling approximately ₹4,07,97,792.

The execution of the Share Purchase and Share Subscription Agreement for the investment in Abhik and Bidhan’s equity shares does not fall within the purview of related party transactions. In addition, the promoter/promoter group/group companies of Praveg Ltd do not have any interest in Abhik and Bidhan.

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.