KenyaBuzz acquired by Nation Media Group. Sources Say The Price Was 2 million

KenyaBuzz today was acquired by Nation Media Group. In an announcement event at  Caramel Lounge, they stated that they had bought 51% of the events listing website.  However, they opted not to state the amount that they spent on the acquisition. Nation  is a public company, so they must have withheld this information because it was too  small to affect the company’s yearly books in a big way. For expenditures of KShs 100m  or more, they would have certainly been obliged to state the figures. Therefore it was  up to connected, enquiring minds to find out what the price was for this deal was. I  took up the task, and after a bit of searching, reliable sources informed me that the  price for NMG’s stake was 2 million Kenyan Shillings.

Shocking, I know

The first reaction of many will be astonishement that after almost 10 years of  operation, and a pretty well known brand, that KenyaBuzz would sell at a price that is  even less than the KShs 5m starting capital they received from the Tandaa Grant a few  years back. However, as someone who has been through this very same process, I can  relate in a way. There comes a time when entrepreneurs just get tired of plugging away  at their startups. Either:

1. the routine gets boring
2. the business is loss making
3. it’s not making enough profit
4. it’s actually making a profit, but the effort that goes into making the money is  too much. You feel like you can make money more efficiently elsewhere

Some of these factors were the driving force behind me seeking to sell of Ghafla last  year. It is highly likely that one of these factors was the driving force behind  this lopsided KenyaBuzz deal. I know this because tiredness or losses is what makes  entrepreneurs sell their babies for throwaway price. If my experience is anything to  go by, KenyaBuzz is now in for a rough ride. In their desperation, they likely agreed  to some even more egregious terms concerning the running of the business, and it will  be an extremely tough initial period of integration. Big corporates are entirely  different beasts from startups. The politics and bureaucracy of corporates can be  draining for an entrepreneur who is used to quick, autocratic decision making.

My Take

Anyway, the deal is done for KenyaBuzz, and all the best to them. But now that I see  the mergers and acquisitions space heating up in Kenya, I feel like I should somehow  find a way to share the lessons I learnt from my experience with other entrepreneurs,  so that we avoid all making the same mistakes. Still thinking of how to deliver the  message, but when I settle on a way, I will let you guys know.

In regards to this  particular case, my advice to others in this situation is that if you’re tired of  running your business, try first and foremost to get someone else to run it. And if  the business is making money, consider just coasting as you make your dividends a last  resort. Strip the costs down till the profit margins are respectable and take home the  profits till the well runs dry, or till you recover your passion for the business.  Selling off at throwaway price should be left to unprofitable companies.

Banks block Nation Media Group’s employees from getting loans

Major banks have stopped offering credit services to Nation Media Group’s employees.

Sometimes in December 2016, the head of corporate and regulatory affairs at Nation Media Group issued a memo dated December 20th 2016 which said that the Kimathi Street-based media house would be reducing its workforce.

Also read: Who is going to be sent packing this time round? NMG to sack more employees in January

The memo sparked chain reaction starting with employees getting sick with apprehension and banks blacklisting NMG employees.

Business Today reports that Standard Chartered bank, Barclays banks and Nation Sacco have temporarily blacklisted NMG as a loan guarantor and have stopped giving loans to Nation employees until the ongoing restructuring is completed.

Apparently the financial institutions decided to blacklist NMG employees for fear of giving loans to people who will be jobless and without means to repay the loans.

Ghafla! contacted NMG employee who revealed he hasn’t tried to access loan services but mentioned a colleague he knew was grumbling about being denied a loan  he had applied.

NMG hasn’t really fired anyone just yet, a few days ago the media fraternity was sent set into panic mode after reports started circulating online that veteran journalist Eric Obino had been fired.

Also read: Eric Obino was never really fired from NMG new evidence shows

 

Who is going to be sent packing this time round? NMG to sack more employees in January

Sheila Mwanyigha, Anto Neo Soul, Sanaipei Tande, Ciku Muiruri were among the big shots that were relieved of their duties at NMG in 2015 when the Kimathi street based media house carried out a massive shakedown. But the employees who survived the axe in 2015 now face the same predicament once again.

Clifford Macharia, head of corporate and regulatory affairs at Nation Media Group (NMG) has issued a memo dated December 20th 2016 which carries news that has surely caused tension amongst employees at NMG.

The Kimathi street based media house has once again announced plans to trim its workforce; it’s not clear how many employees will be retrenched but come January, people will be sent packing.

“Early this year, we embarked on a new strategic journey of transforming the Group into a modern Twenty First Century digital content company. In with this objective, we converged our Business, foreign/international & sports desks in addition to embedding a digital/mobile first culture in the Group. We are satisfied that this process is beginning to deliver the intended benefits including the digital division recording the fastest growth in 2016.

We are now entering the final phase of the implementation. This will involve the reorganization of all our operations across the Group to prioritise our resources and investments in content development, monetization and innovation in line with emerging ways that new age consumers are consuming media. This will allow us grow our new revenues streams while securing our current print and broadcasting businesses in a much more efficient and effective manner.

Regrettably this will result in a reduction of our workforce through job redundancies. This exercise will be undertaken in January 2017 with due respect to our employees and within the provisions of the law.

We wish to reassure our stakeholders that we continue to be committed to delivering value in line with their expectations” The memo signed by Clifford Macharia read.

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