Exclusive: Byju’s secures $2.4b financing to buy US edtech firm 2U

Edtech titan Byju’s has secured US$2.4 billion in acquisition financing from various international banks, two sources close to the development told Tech in Asia. India’s largest startup will use US$2.2 billion out of this amount to buy 2U, a US-based edtech firm.

One of the banks involved in the financing is a global player in the same league as Goldman Sachs, JPMorgan Chase, or Morgan Stanley, according to one source.

Byju Raveendran / Photo credit: Byju’s

While the sources didn’t disclose details about the acquisition financing, they said the terms were “favorable” for Byju’s.

At present, 2U’s market capitalization is at US$944 million. At the current acquisition price, it would mean that the company is being acquired at a 75% premium.

Last week, it was reported that Byju’s made a bid to purchase 2U for over US$1 billion, offering US$15 per share to the board of the US-listed edtech firm.

Since the news broke out, 2U shares on the Nasdaq have jumped by over 20%. The uphill trajectory of its share price continued on Monday, as its shares closed 17% up at US$12.24 apiece.

The acquisition deal has not been finalized and is pending approval from 2U’s board.

Byju’s also announced this week that it has completed the due payment to acquire Aakash Educational Services, a local chain that offers tutorial courses online and offline. This comes in the wake of reports that Byju’s had delayed payments for the acquisition deal.

See also: Byju’s aims to be profitable by FYE 2022 despite acquisition spree

Byju’s also said that it had received most of the US$800 million funding that it unveiled in March. The company also told Tech in Asia that its audited financial results will be announced in the next 10 days.

It was previously reported by The Ken that Byju’s 2021 financials were delayed because it was awaiting approval from its auditor, professional services giant Deloitte.