India's Byju's Said to Offer Over $1 Billion for 2U to Expand in US
Indian online-education provider Byju’s has offered to buy 2U Inc. in a cash deal that values the US-listed edtech company at more than $1 billion, a person familiar with the matter said.
Byju’s made the offer of about $15 a share to 2U’s board last week, said the person, who asked not to be named as the bid isn’t yet public. The offer represents a 61% premium to 2U’s closing price of $9.30 on the Nasdaq on Tuesday and gives the Lanham, Maryland-based company an enterprise value of about $2 billion.
Byju’s, one of the world’s most valuable startups with backing from Tiger Global Management and Mark Zuckerberg’s Chan Zuckerberg Initiative, is accelerating its expansion globally through acquisitions. Bloomberg reported in May that Byju’s was likely to bid for either 2U or Chegg Inc. Talks with Santa Clara, California-based Chegg haven’t progressed, the person said. 2U surged more than 17% in pre-market trading in New York.
The talks with 2U could still fall apart and a deal may not materialize if its board rejects the offer. 2U has a current market value of $717 million and about $1 billion in debt and other liabilities. A representative for 2U declined to comment. Byju’s and Chegg didn’t respond to requests for comment.
Byju’s has secured financing of more than $2.4 billion for whichever deal it finally pursues as it looks to step up its growth and global expansion, said the person. While debt financing is more expensive than just three months ago, assets are cheaper and deals are still looking attractive, the person said. Shares of 2U have declined more than 80% since a peak of $55.55 in early 2021.
Meanwhile, Byju’s is pushing back payments for an approximately $1 billion acquisition of test-preparation provider Aakash
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