Term-sheet for Flipkart’s Snapdeal acquisition signed
The process of selling marketplace e-commerce company Snapdeal to Flipkart has started.
According to sources close to the deal, three months after SoftBank, the e-commerce player’s largest investor, floated the idea before the Snapdeal board, Flipkart, the Bengaluru-based marketplace major, started the process of due diligence last week.
While the term-sheet was not signed last week, sources said the process of due diligence was given the go-ahead after Snapdeal’s board of directors agreed unanimously to Japanese telecom major’s proposal to sell the beleaguered e-commerce player.
“Once the due diligence started, signing the nonbinding term-sheet was nothing more than a formality. It was, however, signed on Tuesday and Flipkart is in the process of looking at the financials of the company,” said a source close to the board.
It is a matter of another week before Flipkart completes the process and after that the merger of the two companies would start.
The countdown for the closure one year, had to let go of a of the Gurgaon-based online major chunk of its employees. marketplace began soon after Nexus Venture Partners, the Snapdeal board signed the another investor in Snapdeal, non-binding term-sheet, giving could get close to $80 million SoftBank the official goahead and a stake in the merged or to start proceedings to new entity, while Kalaari, a sell Snapdeal to Tiger Globalbacked third investor, could get $7080 Flipkart. million. Snapdeal cofounders
SoftBank, in an email reply Kunal Bahl and Rohit to the query, said it would not Bansal would get around $60 comment on the details of the million for their 6.5 per cent negotiations. Flipkart, led by stake in Snapdeal. A non-binding Sachin and Binny Bansal, does term-sheet to start due diligence not plan to keep the Snapdeal by Flipkart for Snapdeal brand alive. According to is expected to be signed in the sources close to the Snapdeal next few days between the two board, unlike Myntra and parties. Meanwhile, Snapdeal’s Jabong, which are being run online wallet company, independently under Freecharge, has signed a nonbinding Flipkart’s umbrella brand, term-sheet with Snapdeal's journey is likely Paytm, which is interested in going to end within a year of acquiring the company. the merger. According to Paytm, it will buy
Snapdeal, whose valuation the company only if it adds came down from $6.5 billion enough value to the merchant to less than a billion in the past base and is priced correctly.