Dentsu subsidiary in India, Dentsu Media and Holdings India (DMHI), has reached an agreement with venture capital and private equity firm Capital18 and other shareholders of Webchutney Studio to acquire 80 per cent stake in the digital agency, a statement said here.
Under the terms of the agreement, the company will become a wholly-owned subsidiary of DMHI by 2017, it added. No financial details were disclosed.
The divestment by Network18 is in line with its stated objective of profitably monetising investments to create value for the shareholders of the company.
Capital18 was a majority shareholder of Webchutney and the investment has generated a return of over 300 per cent, Network18 said.
"The divestiture of Webchutney is a reflection of our commitment to profitably monetise our investment portfolio for the benefit of our shareholders and to also facilitate the growth of these businesses to the next level," Network18 Managing Director Raghav Bahl said.
Bryan, Garnier & Co acted as the sole advisor to Capital18 and other selling shareholders.
Shares of Network18 Media & Investments Ltd fell by 2 per cent to close at Rs 35.25 a share on BSE today.
Established in 1999, Webchutney will now become part of the Dentsu India Group of companies which operate under the umbrella of Dentsu Aegis Network Ltd.
In February this year, Network 18 received Board approval to divest its stake in business directories - Yellow Pages and ASK Me.
In December last year, Network18 sold its entire stake in financial data and news terminal business 'NewsWire18' to private equity firm Samara Capital for Rs 90 crore.
Previously, it had sold its stake in one of the Capital18 investee companies -- NetworkPlay and then partially diluted stake in digital commerce firm, Bookmyshow.com.