Tanla Platforms Limited has signed a definitive share purchase agreement to acquire 100 per cent of ValueFirst Digital Media Private Limited from US-based Twilio for an all-cash consideration of Rs 3.46 billion, subject to upward closing adjustments in the range of $2.5-$3.5 million. The acquisition is expected to close in July 2023, subject to closing conditions.
Additionally, Tanla has also signed a binding term sheet to acquire 100 per cent of ValueFirst Middle East FZC for a cumulative consideration of Rs 200 million through a combination of primary investment and a secondary purchase from the existing shareholders, subject to closing conditions. ValueFirst Middle East FZC has a presence in UAE, Saudi Arabia and Indonesia markets and gives Tanla a strong global footprint. This acquisition is expected to close by September 2023.
At an aggregate level across these two distinct acquisitions, Tanla is acquiring entities with approximately Rs 9.5 billion revenue and Rs 520 million recurring earnings before interest, taxes, depreciation and amortisation (EBITDA). Vishwadeep Bajaj, the founder of ValueFirst will lead both acquisitions. ValueFirst Digital Media Private Limited will issue RSUs for key talent worth Rs 500 million (basis the SPA transaction value) vesting over two years, to drive performance and retention.
ValueFirst offers enterprises the ability to connect with their customers globally across multiple communication channels, serving over 1,000 enterprises. More than 80 per cent of ValueFirst’s topline is contributed by customers with greater than three years of relationship. The acquisition of ValueFirst will further strengthen Tanla as an undisputed market leader in the Indian communications platform-as-a-service (CPaaS) space with over 35 per cent share. In SMS, Tanla will further strengthen its revenue market share to about 45 per cent. In addition, this acquisition will help scale other key channels like WhatsApp with a sizable 15 per cent share. ValueFirst has a strategic fit with Tanla. The customer footprint is significantly complementary i.e., nearly 40 per cent of ValueFirst revenue comes from customers that are not new to Tanla. Tanla has about 50 per cent share in large enterprise segment which will now be strengthened by another 20 per cent share in the mid-market enterprise segment
Commenting on the acquisition, Uday Reddy, founder chairman and chief executive officer (CEO), Tanla Platforms Limited said, “Acquisition of ValueFirst will further strengthen our undisputed market leadership in India. We only believe in purposeful acquisitions and have had an incredible track record with Karix acquisition, which has seen 20x EBITDA growth over the last five years. I am confident we will embark on a similar journey with ValueFirst to unlock massive value.”
Meanwhile, Khozema Shipchandler, president, Twilio Communications said, “Tanla is a leading CPaaS provider in the Indian market as well as a longtime customer and partner of ours, making them a natural fit and ideal home for ValueFirst’s customers and employees. Twilio remains committed to India as well as our strategic partnerships and large employee base in the region.”
Further, Vishwadeep Bajaj, CEO and founder, ValueFirst said, “I am very excited to join Tanla, the largest CPaaS player in India and I am confident that we will benefit from significant synergies and scale to address the needs of our enterprises better. I would like to thank Twilio for their support to growing our business over the past couple of years.”
Tanla and ValueFirst are confident that this acquisition will lead to mutually beneficial synergies, facilitating the creation of a more comprehensive CPaaS platform. Tanla believes there is a significant value unlock through multiple revenue synergies levers such as acceleration in international markets like KSA, UAE and Indonesia and cross-sell of complementary products driving revenue synergies. In addition to the revenue synergies, sourcing benefits will improve the cost structure for ValueFirst. Through this strategic move, Tanla reaffirms its commitment to delivering innovative communication services to empower customers and enable companies.
