Ebix buys 80% stake in Mumbai-based ItzCash for Rs 800 crore
The deal is likely to give an exit to ItzCash's existing investors which include Lightspeed and Matrix Partners India
May 24, 2017 / 07:11 PM IST
Nasdaq-listed Ebix, Inc, a leading international supplier of on-demand software and e-commerce services for insurance, financial, and healthcare industries on Wednesday announced an investment of USD 120 million (Rs 800 crore) in Mumbai-based payment solutions company ItzCash, as part of a joint venture with Essel Group.
Ebix will acquire an 80 percent stake in Itzcash as part of the joint venture. Under the terms of the agreement, ItzCash was valued at a total enterprise value of approximately USD 150 million.
The deal includes an upfront cash payment of USD 76 million and a contingent earn out of up to USD 44 million payable over a period of 3 years. The US-headquartered company said that it funded the transaction using internal cash reserves.
With the transaction, Ebix gets an entry into India’s prepaid wallets, cards and bill payments space, which is also heavily dominated by existing players such as Paytm, Oxigen and others.
“In ItzCash, we found attributes that none of their peers had – market penetration across 3000 cities and over 75000 brick and mortar distribution outlets and the only company which was profitable amongst its peers. With India’s Essel group deciding to align their interests with Ebix, the decision to invest in ItzCash became easy for us,” Ebix Chairman, President and CEO Robin Raina said.
The acquisition is expected to be accretive to Ebix earnings within the next 6 to 9 months, the company said in a statement.
Started in 2006, Itzcash has raised USD 5 million from investors such as Intel Capital, Lightspeed and Matrix Partners India.