UTV Software Communications Ltd announced the acquisition of a 51 per cent stake in India’s leading mobile and online gaming company Indiagames for Rs 68 crore and a 70 per cent stake in UK’s Ignition Entertainment, a console gaming company for Rs 60 crore. That’s a total of Rs 128 crore ($29 million) for UTV’s big bang entry into the gaming business. (Read our story here)
I spoke to Vishal Gondal, Director and Founder of Indiagames, for a quick take on the deal:
I thought VCs would invest?
We wanted to go with someone who understands the business. UTV fitted in there. And also it’s a fairly large deal since VCs in India are currently focused on early stage ($5 million) kind of deals.
What does the UTV acquisition mean?
It’s a large deal. What we are trying to do is to create a large gaming entity out of India. The acquisition of Ignition brings in the console gaming capability. We bring in the online and mobile gaming capability. It’s also a sign that how serious gaming business is becoming. UTV is launching a channel for youth, and from that perspective their investment in Indiagames is very strategic. UTV is also very strong in bollywood space, and they are going to help us a lot on creating great content. They understand the broadcast technology and the youth market. So there is a lot of synergy.
UTV also has a very large animation business. Adding Indiagames and Ignition to this portfolio, it gives a complete picture of growing a very large company in gaming. And UTV is known for delivering shareholder value.
Will UTV integrate these companies into themselves?
Currently we all are working as separate entities. In the long run, we need to see how they pan out.
What are the specifics of the deal, who are the exiting shareholders?
Post transaction the shareholders of the company will include Cisco Systems, Adobe Inc. (thrpugh Macromedia) and management. TOM Online is exiting.
Have you sold any stake?
Of course not. Management, who roughly holds 20 per cent, will not only remain but also rewarded with stock options.