Ad-for-equity media investor DB Corp, that publishes Dainik Bhaskar newspaper, is investing Rs 2.67 crore in DMC Education Ltd. DMC Education (earlier known as DMC International) had diversified from its original business of real estate to education sometime back and has been actively snapping small firms to build its presence in the sunrise sector.
Warburg Pincus-backed DB Corp will subscribe to one zero per cent fully convertible debentures of the company having a par value of Rs 2.67 crore. This will be compulsorily convertible into equity shares at the end of one year from the date of allotment.
DMC Education scrip rose 5.84 per cent to close at Rs 10.88 at BSE on Wednesday, in a firm Mumbai market.
At the last traded market price, DB Corp will end up with 9.7 per cent in DMC Education on conversion of the debentures(not counting other outstanding convertible securities), according to VCCircle estimate.
The company will spend the subscription amount for advertisement and brand building.
DMC Education has sewn a string of similar ad-for-equity deals with other media groups over the past year. Last August it announced that it has entered into a debenture subscription agreement with HT Media Ltd(that published the Hindustan Times)for a deal worth Rs 1.5 crore through fully convertible debentures.
Late last year DMC Education also struck a similar deal worth Rs 2.67 crore with Times of India Group through a convertible debenture issue.
DMC Education is into the fast growing field of providing training for various entrance examinations. It seeks to establish itself across India in the supplemental education market.
Last month it had acquired PLANSTEPS, a 14 year old education consulting and carrier counseling firm for Rs 4.5 crore (~$1 Million). The firm had last year also acquired Vsoft, a Mumbai based Indian language software development company, for Rs 1.5 crore. Vsoft Services Pvt Ltd, was promoted by Rajiv Prakash Khare (M.Tech-IIT, Mumbai) is the pioneer in development of Indian bilingual software.
One year ago it also in talks to snap Quest Tutorials, a specialized coaching firm in the IIT-JEE segment, that was started in 2002 by two IITians, Praveen Tyagi and Gaurav Mittal. However, the transaction didn’t go through.