The board of India-based online marketplace Snapdeal has accepted an offer by rival Flipkart to buy the company, in a deal that would allow several corporate backers to exit, Reuters reported today.
Flipkart’s offer was sized at between $900m and $950m, according to two sources familiar with the matter, and Snapdeal’s board will now present it to the company’s shareholders for approval.
Snapdeal operates one of India’s most popular e-commerce platforms, listing more than 60 million products, but it has been unable to move into profit and was essentially pushed into an acquisition when key investor SoftBank withdrew an offered $200m in debt financing in April this year.
The company has raised more than $1.7bn since it was founded in 2010, and was valued at between $6.5bn and $7bn as of a $200m funding round backed by media group Bennett Coleman and Co, Ontario Teachers’ Pension Plan, Iron Pillar and Brother Fortune Apparel in February 2016.
Telecommunications firm SoftBank, e-commerce companies eBay and Alibaba, contract manufacturer Foxconn, semiconductor supplier Intel and mobile software producer Myriad are all among Snapdeal’s investors.
Negotiations over a prospective acquisition have been ongoing since April, with Snapdeal reportedly holding out for a $1bn figure.
A potential barrier could still be Azim Premji, the head of Snapdeal investor Premji Invest, who according to Bloomberg has objected to special payments to the company’s co-founders and early investors. The deal would need his approval, according to the Economic Times.
Snapdeal’s other backers include venture capital firms Kalaari Capital and Nexus Venture Partners, each of which hold a board seat, as well as BlackRock, Temasek, Ru-Net, Saama Capital and Bessemer Venture Partners.