Reliance Retail Ventures, an arm of RIL, is buying Just Dial in a cash deal worth £571 million, as India’s largest and most profitable player enters the local search services space. The company is acquiring the local search engine, which boasts more than 30 million listings of enterprises across web, app and voice platforms.
The acquisition is one of Reliance’s significant M&As, dwarfing its purchase of online pharma retailer Netmeds and British toy maker Hamleys for over £62 million each. Under the contours of the deal, Reliance is acquiring 40.95% in Just Dial by subscribing to preferential shares and buying shares from its main promoter V S S Mani and his family for £349.7 million. Further, it will make an open offer to acquire an additional 26% from Just Dial’s public shareholders entailing about £222.2 million. Reliance will make the open offer to Just Dial’s non-promoter shareholders at about Rs 1,022 apiece.
If Reliance gets the entire 26% through the open offer, its stake in Just Dial will go up to 66.95%. The transaction will see the local search engine maintained as a separate entity, with founder Mani continuing as its CEO to “lead Just Dial through the next phase of growth”. The Just Dial board approved Mani’s reappointment as CEO for another five years.
In its regulatory filing, Just Dial said while the company will be under the sole control of Reliance, Mani, who is currently a promoter, will exercise his voting rights under the instructions of the retailer. Mani’s brother V Krishnan, however, will step down from his role as a director of the company on expiration of his term on July 31, Just Dial said.
The deal will help Reliance get access to Just Dial’s massive database,“further boosting the digital ecosystem for millions of our partner merchants, micro, small and medium enterprises”, according to Reliance Retail director Isha Ambani. The capital infused via preferential shares will help the expansion of Just Dial into a comprehensive local listing and commerce platform, the Reliance statement said. Besides Netmeds and Hamleys, Reliance has bought online furniture seller Urban Ladder and lingerie retailer Zivame in the last two years.
