A person familiar with the matter said that the US-listed edtech company has more than $1 billion in a cash deal that offers to buy 2 U Inc. In a cash deal that values the US-listed education provider Byju s at more than $1 billion.
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Byju s made the offer of $15 a share to 2 U s board last week, said the person who asked not to be named as the bid isn't yet public. The offer gives the Lanham, Maryland-based company an enterprise value of about $2 billion, a 61% premium to 2 U s closing price of $9.30 on the Nasdaq on Tuesday.
Byju s, one of the world's most valuable startups with backing from Tiger Global Management and Mark Zuckerberg's Chan Zuckerberg Initiative, is accelerating its expansion globally through acquisitions. The person said that Byju s was likely to bid for either 2 U or Chegg Inc. Talks with Santa Clara, California-based Chegg haven't progressed in May. 2 U increased by more than 17% in pre-market trading in New York.
The talks with 2 U could still fall apart and a deal may not happen if the board rejects the offer. 2 U has a current market value of $717 million and about $1 billion in debt and other liabilities. A representative for 2 U didn't want to say anything. Chegg and Byju didn't respond to requests for comment.
According to the person, Byju s has secured financing of more than $2.4 billion for whichever deal it pursues as it looks to step up its growth and global expansion. The person said that debt financing is more expensive than just three months ago, but assets are cheaper and deals are still attractive. Since the peak of $55.55 in early 2021, the shares of 2 U have declined more than 80%.
According to people familiar with the matter, Byju s is putting back payments for an approximately $1 billion acquisition of test-preparation provider Aakash Educational Services struck last year. One person said that Byju s asked to postpone payments until August because regulators have yet to clear the acquisition, and that it had nothing to do with cash shortages. The shareholders of Aakash agreed to the extension.
According to market researcher CB Insights, Byju s is India's most valuable startup with a valuation of $22 billion. Its sponsors include Silver Lake Management, Naspers Ltd. and Mary Meeker's Bond Capital.
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