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James Murdoch and Uday Shankar-led Bodhi Tree invests $600 million in test prep firm Allen

The investment in Allen comes at a time when the test prep market is in the thick of action, and traditional test prep brands are reshaping themselves through investments, mergers and acquisitions.

New Delhi / May 01, 2022 / 09:03 PM IST
The Maheshwari family.

The Maheshwari family.

James Murdoch and Uday Shankar-led platform Bodhi Tree Systems on May 1 announced an investment of $600 million in Kota-based test prep firm Allen Career Institute.

The “strategic partnership” and investment, the organisations said, will help Allen expand its offerings, and fuel physical and digital expansion across various Indian cities, a spokesperson of Allen said.

The investment will come from Bodhi Tree Systems, a newly formed platform between Lupa Systems Founder and CEO James Murdoch and Uday Shankar, the former president of The Walt Disney Company Asia Pacific and former chairman of Star and Disney India.

The official announcement did not mention at what valuation the investment has come. But a source said the three-decade-old test prep company headquartered in Kota, which has a presence in 46 cities in India and the Gulf region, was valued at more than $1 billion, and Allen is likely to expand its base more in the growing edtech space.

“We believe that education is on the cusp of a technology-led renaissance that will fundamentally alter how education is imparted and will increase its efficacy…We are excited to work with the Maheshwari family to build an outcomes-focused digital education company that delivers on the aspirations of millions of learners and parents in India and beyond,” Murdoch and Shankar said in a statement.

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“Education is a critical consumer need, driven by its deeply transformative impact on lives and livelihoods of consumers,” the duo added.

The investment in Allen comes at a time when the test prep market is in the thick of action and traditional test-prep brands are reshaping themselves through investments, mergers and acquisitions. While Aakash Education was acquired last year by BYJU’S for nearly $1 billion, another leading test prep brand T.I. M.E was acquired last month by listed edtech player Veranda Learning for Rs 287 crore.

The investment in Allen by Bodhi Tree comes amid a strong buzz that a leading edtech is looking to acquire a sizable stake in Allen, but could not get through due to the valuation issue.

Established in 1988, Allen is a leading test prep brand that prepares students to crack engineering entrances like IIT JEE Mains and JEE Advanced, medical entrance NEET, Olympiads and a few more competitive exams.

“Our partnership with Bodhi Tree is an essential ingredient in furthering our mission to significantly increase Allen’s reach and impact. We are quite pleased and excited that the Bodhi Tree team also sees value in combining their expertise with our experience in education,” said Rajesh Maheshwari, a founder director of Allen.

Keshav Maheshwari, from the second generation of the Maheshwari Family that owns Allen, said, "Our partnership with Bodhi Tree will not only help us scale our Indian operations through technology but also fuel our growth journey in the middle-east (Asia)."

Bodhi Tree Systems said it will leverage its founders’ shared track record of building iconic consumer businesses to build Allen into a world-class digital education business of the future. Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar, is an investor in Bodhi Tree Systems.

The deal is likely to close in two to three months, subject to regulatory approvals.

Consulting firm EY acted as the exclusive financial advisor. Law firm Cyril Amarchand Mangaldas provided legal advisory and documentation support to Allen. EY also provided due diligence services to Bodhi Tree. AZB & Partners were the legal advisors to Bodhi Tree.
Prashant K Nanda is an Associate Editor at Moneycontrol .
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