Future Ventures is in talks to sell its stake in ACK Media for about $25-$29 million, reports Reuters (via Mint). The Future Group has picked up 65.84% in ACK Media over two years – 26% for a reported Rs 37 crore in 2011, following that up with an acquisition of another 30%, and finally buying around 9% more in April 2012.
Elephant Capital owns 26% stake in ACK Media, and had invested GBP 3.2 million in June 2010, GBP 0.9 million in April 2011. An interim report for the six month period ended February 28th 2013 suggests a significant diminution in the value of its investment: it says that its GBP 4.085 million investment is now worth GBP 2.13 million, having lost almost half its value, and hence a loss of GBP 1.955 million.
Going by the valuation that Elephant Capital had estimated, ACK Media should be valued at around GBP 8.19 million (around $12.79 million at current rates), and hence, the Future Group’s 65.84% stake would be valued at around GBP 5.39 million, or, at current rates, at around $8.41 million. In that context, Future Ventures’ alleged expectation of $25-29 million appears to be irrational. But then, valuation lies in the eyes of the buyer.
A recent Business Today story points out that Samir Patil and Shripal Morakhia, who founded ACK Media and bought Amar Chitra Katha and Tinke from India Book House, and then in 2010 bought India Book House itself, exited the business in 2012. Current CEO Vijay Sampath took over from Patil in November 2011. ACK has a catalogue of over 750 print and digital products and 25 major (and over 50 minor) proprietary characters. ACK has tried a number of things – or said that it is trying a number of things – including films, TV, online and mobile, games. There have been rumors about its plans to launch one about launching an amusement park, and a statement from the company regarding plans for a TV Channel as well, and even a potential IPO (in 2008) which haven’t seen the light of day.
ACK Media has been a disappointment, and the decline in value as indicated by Elephant Capital is one of the indications that it hasn’t done well. More than that, much like that other over-hyped initiative Virgin Comics, ACK Media had the potential to created business likes across media platforms for its titles and characters, but due to lack of financing, or maybe due to a lack of focus given the sheer number of things that they kept talking about wanting to do, the venture lost the opportunity. The TV series was a significant achievement, but maybe consumers have changed and evolved, and the company got stuck in history.