US-based on-demand software and e-commerce services firm Ebix is acquiring Indian payments service ItzCash. The company will pay $120m for an 80% stake of the Essel Group-owned business.
ItzCash operates in the prepaid cards and bill payments space across multiple sectors and claims to be the only profitable payments solution provider in the region.
The company processes 600,000 transactions daily with an annual payment volume of $2bn. It was valued at $150m as a result of the deal.
ItzCash will received the $120m in $76m in upfront cash with the remaining $44m paid out over three years. Ebix funded the deal through cash reserves from its Indian and Singaporean subsidiaries. The acquisition is expected to be accretive to its earnings within the next 6 to 9 months.
Ebix Chairman, President and CEO Robin Raina commented explained the decision and said: “In ItzCash, we found attributes that none of their peers had – market penetration across 3,000 cities, 75,000+ brick & mortar distribution outlets, a CAGR of approximately 35% and the only company who was profitable amongst all its peers.
“With one of India’s most prominent business houses, the Essel Group deciding to align their interests with Ebix, the decision to invest in ItzCash became easy for us.”
ItzCash Managing Director Naveen Surya said: “We are thrilled to be associated with a world-leading exchange like Ebix and the opportunities that Ebix’s new investment in ItzCash offers us.
“This is a testament to our belief and roadmap for growth to deliver comprehensive financial services across emerging India. Having established our leadership across Payments, Remittances and Corporate Solutions already, we will deepen our foray now in the areas of credit, insurance, healthcare.”
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