Sportskeeda has signed definitive agreements to acquire a 73.27% stake in Pro Football Network LLC for $1.82 Mn
Pro Football Network is a leading source of coverage and analysis of the National Football League with almost 5 Mn monthly average users
Sportskeeda’s parent entity Absolute Sports is looking to pursue multiple acquisitions in the near future to further strengthen its position in the sports media landscape, its CEO said
Sports news platform Sportskeeda, a subsidiary of gaming major Nazara Technologies, has signed definitive agreements to acquire a 73.27% stake in Pro Football Network LLC for $1.82 Mn (about INR 16 Cr) in an all-cash deal.
The acquisition marks Sportskeeda’s parent entity Absolute Sports’ first acquisition in the US sports media market as the company looks to bolster its existing user base and offerings in the country.
Pro Football Network is a premier source of coverage and analysis of the National Football League (NFL) with almost 5 Mn monthly average users (MAUs). The deal will be conducted through a combination of primary investment and secondary purchase from its existing shareholders, Nazara said in an exchange filing.
Absolute Sports will use its cash reserves to fund the transaction.
Further, Sportskeeda also reserves an option to acquire up to 10% and up to 8% additional stake in the company in 2024 and 2025, respectively.
“Our flagship brand, Sportskeeda, has achieved phenomenal success, with an increase from 15 Mn MAUs in 2019 to over 76 Mn in 2023, all while maintaining highly profitable operations. With this acquisition, we are happy that we have kick-started our M&A growth engine,” said Ajay Pratap Singh, CEO of Absolute Sports.
Singh added that the company is looking to pursue multiple acquisitions in the near future to further strengthen its position in the sports media landscape.
The deal is expected to be completed on April 10, 2023.
As per Absolute Sports, Pro Football Network’s in-depth coverage of the NFL will add value to its existing portfolio of sports media brands. The acquisition will help both companies derive synergistic value, enabling extended coverage from the US. Pro Football Network had a turnover of $2.1 Mn as on December 31, 2022.
“The PFN (Pro Football Network) acquisition kickstarts an inorganic growth strategy in addition to the rapid organic growth in revenues and profitability that the company has been delivering, said Nitish Mittersain, CEO and Joint MD of Nazara.
In 2019, Nazara acquired a stake in Absolute Sports for the first time. Recently, in July last year, the gaming startup invested an additional INR 20.10 Cr in Absolute Sports to increase its stake in the “fast-growing and highly profitable” subsidiary.
The 2009-founded company covers sports and esports news across the world via its flagship brand Sportskeeda and currently claims to serve over 100 Mn users every month. In Q3 FY23, Sportskeeda saw a 26% year-on-year (YoY) revenue growth to INR 356 Cr, led by the growing business in the US market.
Together with Nodwin Gaming, Nazara’s esports vertical contributed 49% of Nazara’s total revenue during the quarter.
Overall, Nazara’s operating revenue surged nearly 70% YoY to INR 314.8 Cr during the quarter with a consolidated net profit of INR 22.4 Cr.
Over the last year or so, Nazara has chosen the inorganic route for expansion. Last year, its subsidiary Nodwin Gaming acquired a 35% stake in gaming accessories brand Wings for INR 10.01 Cr. Prior to that, Nazara acquired a majority stake in advertising technology firm Datawrkz.
In August last year, Nazara also acquired a 100% stake in the US-based gaming firm WildWorks in an all-cash deal to further strengthen its gamified early learning vertical.
In a recent research note, ICICI Securities said that Nazara can use its cash balance of over INR 600 Cr to acquire scale through acquisition in real-money gaming. Meanwhile, the brokerage said that it expects the EBITDA margin for the overall esports business to improve by about 200 basis points (bps) YoY in FY24.
The brokerage has a ‘buy’ rating on the company. Shares of Nazara ended today’s session marginally higher at INR 506.75 on the BSE.