Allen Career Institute might buy Unacademy for $800 million: Report
Leading edtech firm Unacademy is said to be in advanced talks with Allen Career Institute for a potential acquisition deal. According to The Economic Times, the deal could value Unacademy at about $800 million, a far cry from its peak valuation of $3.4 billion. The negotiations have been ongoing for months now and are pending final approval from the Maheshwari family, the promoters of Allen Career Institute.
Deal hinges on Maheshwari brothers' approval
The success of the potential acquisition deal hinges on getting the Maheshwari brothers' consent to merge Unacademy with Allen. While other stakeholders are said to be on board, the final call is with the family. Investment banks representing both parties have been engaged in the discussions. If it goes through, the merger would mark a major consolidation in the edtech sector, which has slowed down post-COVID-19.
No official comments from Unacademy or Allen
Neither Rajesh Maheshwari, the Founder and Director of Allen, nor Nitin Kukreja, the CEO, have responded to emails seeking comment on the matter. Similarly, Gaurav Munjal, co-founder and CEO of Unacademy has not provided any comment on this potential acquisition deal.
Unresolved issues in the potential merger
According to a source familiar with the negotiations, "The valuation of both companies will be used to fix the share swap ratio, and that process has not yet been completed." The discussions are also yet to conclude on possible cash payouts for Unacademy's founders and early investors. Despite controlling its losses, Unacademy's revenue has remained stagnant while Allen Career Institute has seen a major business downturn due to issues in the Kota coaching ecosystem.
