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Deccan Chronicle to acquire South Indian retail chain
Deccan Chronicle will acquire South-India based retail
chain Odyssey India Ltd in an all cash deal for Rs 61.20 crore.
BY A CORRESPONDENT
6 September, 2005: The board of directors of Deccan
Chronicle Holdings Limited (DCHL), publishers of "Deccan
Chronicle" - in the board meeting held today approved
acquisition of South-based retail chain, Odyssey India Limited
(Odyssey) for Rs 61.20 crore.
In an all-cash deal, DCHL will acquire 100% equity of Odyssey
comprising 115,14,140 shares with face value of Re 1 for a
total consideration of Rs 61.20 crore from its promoters and
others.
Odyssey is a one of the fastest growing leisure retail chain
which sells books, music, toys, greeting cards and FMCG
products of leading domestic and international brands. Some of
these brands are ITC, Cadbury, Duracell, Parker, Penguin, etc.
Odyssey currently has 50,000 sq ft of retail space in 12
locations out of six cities (Chennai, Hyderabad, Trichy,
Coimbatore and Salem in South and Varanasi in North) with
daily footfall of 5400 customers.
Odyssey is in a major expansion mode and hopes to acquire
national footprint by March 08. Currently it is working on
adding another 125000 sq ft by March 07 to set up seven large
format stores in Southern and Western India (Bangalore,
Cochin, Vizag, Vijaywada, Mumbai, Pune and Nagpur). In the
next phase which will be completed by March 08, Odessey will
add another 100,000 sq ft in Northern India (Delhi, Lucknow,
Noida, Chandigarh, Ludhiana, Jaipur and Ahmedabad).
Explaining the rationale of the acquisition, Mr. T Venkattram
Reddy, Chairman, DCHL, said, "Odyssey's acquisition is a
strategic move which brings synergies at two levels. It not
only brings us closer to consumers in relevant markets who are
our readers but also brings us closer to large FMCG companies
who are big advertisers. Our newspaper, Deccan Chronicle, one
of largest English daily in South India, is a bridge between
these consumers and advertisers."
Commenting on the occasion, Mr. T S Ashwin, Managing Director,
Odyssey India Limited, said, "Odyssey is rapidly moving from
smaller stores of about 4000 sq ft to large format retail
stores with average size of about 15000 sq ft per store and is
expanding aggressively. While the current management will
continue to run the business, DCHL will give Odyssey much
desired scale, bandwidth and other benefits of being a listed
entity."
DCHL is acquiring Odyssey at 0.68 times Odyssey's FY07
revenue, which is expected to be Rs 90 crore. For FY08,
Odyssey is expected to post revenue of Rs 150 crore. Odyssey
India would be merged into DCHL and will become its division.
However, the current management of Odyssey will be retained
and will be responsible for Odyssey's management and future
growth.
DCHL has revised FY06 revenue and profit guidance upwards from
the earlier guidance following the Board of Directors'
approval of Odyssey's acquisition.
The FY06 revenue guidance has been revised from Rs 280 - 300
crore to Rs 330 - 350 crore while guidance for profit after
tax has been revised from Rs 65 - 70 crore to Rs 70 - 80 crore.
Mr. P. K. Iyer, Executive Director, DCHL, said, "The
acquisition will give substantial fillip to DCHL's revenue and
profits. Moreover, the margins in retail category in which
Odyssey operates that is books, music, pens, cards and other
high value FMCG product are quite attractive. Like our
publishing business, our approach to this business would also
be aggressive and we will continue to expand in geographies
relevant to us."
BY A CORRESPONDENT
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