Nazara Tech up 3% on Pro Football Network acquisition

The share price of Nazara Technologies gained 3 percent on March 23 morning, a day after its subsidiary, Sportskeeda, acquired Pro Football Network, the NFL publisher in the US.

On March 22, the gaming and sports media platform announced that Absolute Sports (Sportskeeda) signed an agreement to acquire a 73.27 percent stake in Pro Football Network LLC (PFN), a source of coverage and analysis of the National Football League (NFL) and college football, for Rs 16 crore.

“The proposed investment is part of Sportskeeda growth strategy to strengthen the strategic position and presence of Sportskeeda in the US digital sports media market. The proposed acquisition will help Sportskeeda in increasing its revenues in digital media space,” said the company filing.

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This marks the first acquisition for Absolute Sports in the US sports media market and is expected to be completed by April 10, 2023. The company is looking to pursue multiple acquisitions in the near future to further strengthen its position in the sports media landscape, it said.

Also Read: Nazara tech swings from 3-day losing streak; ICICI starts coverage with 44% upside

Entering US market 

PFN, a sports digital media publisher focused on content related to NFL, has an average monthly active user base of around 5 million on its official website in the US.

The company also operates another website, www.collegefootballnetwrok.com which focuses on the college football market in the US. Its revenue for the year ending December 2022 stood at $2.1 million against $1.3 million in 2021.

In Q3FY23, average monthly active users (MAU) for Sportskeeda stood at 76.9mm against 60.0mm in Q3FY22, while revenue grew 59 percent YoY for the nine-month period led by a 100 percent growth in US business, according to brokerage firm ICICI Securities, which recently initiated coverage on the stock with a “buy” rating at a target price of Rs 700.

Overall, Nazara Tech’s revenue grew 69 percent YoY to Rs 315 crore in Q3FY23, with esports accounting for 48 percent of revenue. Earnings before interest, taxes and depreciation & amortisation (EBITDA) stood at Rs 31 crore compared to Rs 30 crore in Q3FY22. Net profit for the quarter stood at Rs 22 crore against Rs 17 crore in Q3FY22.

Also Read: SVB fallout: Nazara Tech’s subsidiaries transfer most of its cash deposits to external bank accounts

The share price of Nazara Tech has declined 42 percent in the last year and witnessed a slump after it recently announced that two of its subsidiaries held Rs 64 crore in collapsed Silicon Valley Bank (SVB), of which it now has unrestricted access.

At 10.47 am, the scrip was trading 1 percent higher on the NSE at Rs 510.50, while Nifty IT was trading 1 percent low at 27,974.90 points.

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