HT Media Ltd, which publishes Hindustan Times, Hindustan and Mint newspapers among other properties, said on Wednesday its board has approved the acquisition of Mosaic Media Ventures Pvt. Ltd from News Corp.
Mosaic Media operates digital media properties VCCircle.com and Techcircle.in. It also has a corporate and deals database called VCCEdge and other units such as VCCircle Training. Besides, it runs a premium-content driven conference business and a research-driven platform called SalesEdge for adoption of digital technologies.
The acquisition comes five years after Mosaic Media was acquired by News Corp, one of the largest news and information services providers globally that publish leading dailies such as The Wall Street Journal in the US and The Times in the UK.
News Corp has not issued a statement yet but the transaction is believed to have been triggered by a change in India’s foreign investment norms for digital media businesses announced last year. The move restricted foreign investment in digital news media to 26%, in line with the FDI policy for print news publications. Prior to this rule there was no specific restriction on foreign investment in the digital news media business. This had allowed NYSE-listed News Corp to buy 100% of Mosaic Media in March 2015 from its founder and other private investors.
In a stock-exchange disclosure, HT Media termed the acquisition as a “strategic investment” to drive synergies across businesses. It said that it expects VCCircle and Techcircle to augment the editorial capabilities of its business daily Mint’s technology and deals content.
On the event business side, HT Media would use its reach to augment VCCircle’s events business as well as scale up the database and research business and unlock cost and revenue synergies.
The acquisition is expected to be completed by the end of next month.
HT Media said its board approved an investment of up to Rs 6 crore after working capital adjustment, and revenue-linked milestones payment of up to Rs 1 crore on a deferred basis, to acquire Mosaic Media. It didn’t share further details on the actual enterprise value of the firm.
Shares of HT Media gained 2.24% to close at Rs 12.30 apiece in a weak Mumbai market on Wednesday.
Mosaic Media was incorporated in 2007 by PV Sahad. The Delhi-headquartered company has around 125 employees. The company reported revenue of Rs 14.5 crore for the financial year 2019-20, compared with Rs 14 crore for 2018-19 and Rs 9.1 crore for the year before.
VCCircle.com is the pre-eminent source of news, information, data and analysis on alternative investments in India. The platform covers deals, exits, mergers and acquisitions, investors, investments, entrepreneurship, management and strategy. It is the first news website in India to have launched a premium subscription model way back in 2012.
Several newspaper groups, including HT Media, have over time put their news content behind a paywall as a new revenue strategy. Globally, the news business has been moving much more swiftly to a subscription-led business model as the traditional advertisement-led strategy was disrupted in the digital world with the revenue pie getting fragmented and dispersed.
Part of the KK Birla group, HT Media is a publicly listed company that houses the English media publications of the group and is the parent of a separately listed company that publishes Hindi newspaper Hindustan. It also has a clutch of digital properties and runs an FM radio business through Fever 104 FM, Radio Nasha and Radio One.
HT Media reported consolidated net revenue of Rs 2,104.7 crore for the financial year ended March 2020 with a net loss of Rs 217.4 crore. This compares with revenue of Rs 2,193.8 crore with a net loss of Rs 26.9 crore for the previous year.
The company's listed subsidiary Hindustan Media Ventures Ltd generates over a third of its overall revenue and is a profitable business, having churned out a net profit of Rs 116.3 crore for 2019-20. Hindustan Media Ventures counts private equity firm ChrysCapital as a minority shareholder.
News Corp's India exposure
For News Corp, the deal with HT Media scales down its exposure to India. The company had acquired or invested in four digital properties between 2014 and 2017. Besides acquiring Mosaic Media, it had picked up a minority stake in real estate portal PropTiger and bought BigDecisions, a content-driven platform that aimed to help users make better investment decisions.
In 2017, News Corp acquired GyanMatrix Technologies (now renamed as News Technology Services) in a deal that was aimed at boosting its technology backend.
These were in addition to its significant book publishing business HarperCollins and its global news products The Wall Street Journal and Dow Jones Newswires, which have a limited presence in India.
At the time of acquiring Mosaic Media, News Corp chief executive Robert Thomson had said the investment was a sign of the company’s faith in India’s future. “India is an increasingly meaningful part of our portfolio, which is itself increasingly digital and global,” he had added.
PropTiger went on to buy Makaan.com and later merged with Housing.com (all three portals operate independently). BigDecisions was shut a couple of years after its acquisition.