Indian edtech major BYJU’’s has inked the deal to acquire offline exam prep leader Aakash Educational Services Limited (AESL) to consolidate its offline presence. The acquisition valued at $1 billion is the largest stock-and-cash deal in the education space.
“I am happy to have Aakash Educational Services Limited (AESL), a market leader and the most trusted name in the test-prep services, on board with us,” said Byju Raveendran, Founder, and CEO, Byju’s.
Raveendran said the pandemic has brought the importance of the blended format of learning to the forefront. “As we unite our forces to bring together decades of expertise and experience, this partnership will further accelerate Aakash’s growth and success.”
The deal marks BYJU’s efforts to consolidate its play in the test prep segment as competition heats up. Backed by Blackstone, Aakash owns and operates more than 215 exam prep centres across the country aimed at students preparing to enter India’s top engineering and medical schools. The firm serves over 250,000 high-school students.
Blackstone had invested 13.5 billion rupees ($184 million) for a 37.5 percent stake in Aakash in 2019. The investment firm is cashing out partly but remains invested in the merged entity, Aakash Managing Director Aakash Chaudhry said in the video conference. The private equity firm and Aakash’s founders will now become shareholders of Byju’s, the startup said in its release.
Chaudhury rued that the centers were in the bigger cities but the combined force would start targeting the country’s smaller cities and towns. Together with Byju”s, AESL will be able to provide students with the education it was providing but at a much larger scale with multiple delivery channels that can be innovated out of both ecosystems (online and offline), he added. After the integration, Byju”s will make further investments to accelerate Aakash”s growth, he noted.
Chaudhry said AESL will continue to operate as a separate entity and further expand its presence in the country.