Bodhi Tree Systems, the equally owned joint venture between James Murdoch’s Lupa Systems and former Walt Disney Asia Pacific chief Uday Shankar, has completed the acquisition of a 36% stake in Test preparation centre Allen Career Institute, two months after signing the deal.
ET first reported on May 1 that Bodhi Tree had reached an agreement to acquire a significant minority stake in Kota-headquartered Allen for $600 million.
The deal was closed on Friday, July 1, said two people with direct knowledge of the matter.
“Bodhi Tree has picked up a 36% stake, while the promoters — the Maheshwari family — will continue to have a majority stake. There will also be an ESOP pool for the employees,” said one of the people.
Allen is one of India’s largest coaching institutes, preparing students for entrance exams for engineering and medical sciences and for other streams. Founded by Rajesh Maheshwari in 1988, it claims to have a pan-India footprint with a growing presence in the Middle East. At present, it has 138 classroom centres in 46 cities.
Since the announcement of the deal, Allen has started expanding into other divisions, including commerce.
“The enrolment numbers have gone up by 65% in the first three months of this fiscal, compared to last fiscal, despite an all-out teacher poaching war in Kota with rival platforms who are looking at opening offline facilities,” the person said. “With the funding, the digital business will also scale up and transform education and offer quality test preparation across the country.”
The second person said Shankar and the Maheshwari family had been working closely for the last two months on the future vision for Allen’s digital platform under Allen Digital Pvt Ltd. “With Shankar’s experience in building and scaling up Hotstar (now Disney+Hotstar) as the go-to entertainment OTT player in the country, Allen will be looking to replicate the success and position their digital offering as the go-to platform for all the students,” this person added.
He added Bodhi Tree would focus on expansion of Allen’s digital arm, both organically and inorganically, and was already scouting for acquisition targets.
“They have already finalised a very well-known senior executive to head the digital business and will be looking at giving a tough competition to new age ed-tech players, who are trying to enter the offline space,” he said.
Last month, Allen had said its online platform would provide a “curated range” of non-science courses in short-term, long-term, workshops, and crash-course formats, in addition to engineering and pre-medical test preparations through the new platform.
The move has come at a time when Kota, the small town in Rajasthan famous as an educational hub, is witnessing an all-out teacher poaching war between Allen and offline and ed-tech startups.
This started after edtech firm Unacademy opened its offline centre in Kota and announced plans to launch nine more.
Earlier this year, Byju’s had also announced plans to expand its offline presence through the launch of Byju’s Tuition Centre.
ET had earlier reported that companies including PhysicsWallah, Cuemath and Vedantu were also in the process of either expanding or building an offline presence.
Bodhi Tree Systems is a newly formed investment platform by Murdoch, son of media baron Rupert Murdoch, and Shankar.
This is Bodhi Tree’s second big bet. In April, it had entered into an agreement with Reliance Industries to invest Rs 13,500 crore in Viacom18, a 51:49 joint venture between Reliance Industries-owned TV18 and Paramount Global (formerly known as ViacomCBS) for a substantial minority stake.
While forming Bodhi Tree, the two partners had said they would explore acquisition opportunities in the healthcare, education, consumer technology and media & entertainment industries in India, South Asia, and Southeast Asia. It has already secured a commitment of $1.5 billion from sovereign fund Qatar Investment Authority and is believed to be raising another $500 million in the next few months to fund other investments.
