Saregama acquires majority stake in India’s leading digital entertainment company Pocket Aces

https://youtu.be/FMwYNhdVD1A?si=J9eE6HB7ttJ1P12q 

https://youtu.be/oFDhdQ3w134?si=bV4IUyljr5rpiBRb

  • A new chapter in Saregama’s growth story commences with majority acquisition in a fast-growing digital entertainment company Pocket Aces Pictures Private Limited, that owns direct relationship with 95M+ younger digital-first customers across Instagram, YouTube etc
  • Deal:
    • Saregama enters into an agreement to acquire majority stake in fast growing digital entertainment company, Pocket Aces Pictures Pvt Ltd.
    • It will also allow Saregama to extend its footprint in the Youth category, which is a huge strong point of Pocket Aces.
    • Gaining access to Saregama's 150k music assets would enable Pocket Aces to offer its influencers a highly lucrative opportunity to develop Branded Content business, thereby solidifying Pocket Aces' position as the industry leader in Influencer Management
    • This acquisition, with its 95M+ social media follower base, will give Saregama a huge edge in the competitive new content acquisition game.    
  • Pocket Aces
    • Pocket Aces, a Youth-focussed digital content creator and publisher, boasts of an IP catalog of over 3000 content pieces ranging across web series, sketches, music videos and reels on its channels FilterCopy, Nutshell and Gobble, and releases over 30 new pieces of content every day
    • Its long-form studio, Dice Media, has created relatable youth-centric web series across OTT platforms such as Netflix, Hotstar, and Amazon
    • The company’s talent management arm, Clout, manages over 100+ digital influencers
      • Its Influencer Management business, Clout, is the biggest in India, both in terms of no of digital influencers and revenue
  • Synergies:
    • Acquiring Pocket Aces will add on a whole new dimension of IP and a distribution network of over 95 million followers, which Saregama will leverage to further popularize its music library among the 18-35 audience segment
    • It will also create synergies across the artiste & influencer management and long-format video creation businesses of the two companies.
    • With the synergies arising out of this acquisition, the combined revenue of the two Companies is expected to grow at 27-28% over medium-term basis.  
  • Financials:
    • The transaction is an all-cash deal.  
    • Saregama will acquire 51.8% shares for ~Rs 174 crores with a clear path to further acquire another ~41% stake in next 15 months at pre-agreed multiples.
    • Pocket Aces’ Revenue from Operations was Rs. 104 cr in FY23. Revenue has grown by 34% CAGR over the last 4 years and is expected to grow even faster in future

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