ItzCash parent Ebix to acquire Paul Merchants

Mumbai: Ebix Inc., the parent firm of digital payments company Itz Cash Card Ltd, has acquired the money transfer business of Paul Merchants Ltd through its Indian affiliate, the firms said on Thursday. The deal, valued at $40.7 million, is a slump sale, Paul Merchants said in a note to stock exchanges.

The acquisition will be done by YouFirst Money Express Pvt. Ltd, which was acquired by Ebix in August 2017.

“Subject to approval of the shareholders, and other approvals, slump sale of the company’s money transfer service scheme (MTSS) business in India to M/s YouFirst Money Express Private Limited (YMEPL),” Paul Merchants stated in the note.

The agreement, while approved by the Paul Merchants board, is subject to regulatory and shareholder approval.

Paul Merchants is a listed firm offering international money transfer and foreign exchange services. The company’s inward remittance exchange comprises over 20,000 distribution outlets and 165 branches. The firm processes about 6 million transactions every year.

It also controls 35% of Western Union’s inward remittance flows into India. Paul Merchants operates as an agent of Western Union and is the largest international remittance firm in India.

“The addition of this international capability significantly expands upon Ebix’s overall participation in India’s remittance channels, and will allow Ebix’s financial exchange to remit money sent from abroad through Western Union, Ria, Moneygram or Express Money,” said Robin Raina, chairman, president and chief executive officer at Ebix.

While Ebix ItzCash is the largest domestic remittance firm in the country, handling a business volume of $100 million a month, the acquisition of Paul Merchants will serve to consolidate Ebix’s position as the largest international remittance firm in India.

“After the acquisition of Paul Merchants, Ebix ItzCash will have a market share of 60% as against 25% right now,” said Bhavik Vasa, chief growth officer at Ebix ItzCash said.

Ebix is present in more than 40 countries including Australia, Brazil, Canada, India, New Zealand, Singapore, the US and the UK. The company powers multiple platforms across the world in the field of life, annuity, health, property and casualty insurance, processing over $100 billion in insurance premiums annually.

This is the third acquisition by Ebix in the remittance space in the last two months, the other two being YouFirst Money Express and Wall Street Finance Ltd. Paul Merchants will hold 10% stake in the remittance business of Ebix after the acquisition is completed. The stake will be held through YMEPL.

The transaction will increase the distribution network of Ebiz ItzCash as well. ItzCash already has over 75,000 physical retail outlets. After the acquisition is completed, the outlets will number 114,000.

ItzCash is a digital payments firm offering payment services like prepaid cards, money transfer and e-wallet to individual customers.

The company offers cash management solutions and payment processing services to companies. It also provides services like collection and disbursement management services to the government. ItzCash was acquired by Ebix in May this year for a consideration of Rs800 crore.

On Thursday, shares of Paul Merchants rose 3.09% to close at Rs4,663.35 a share on BSE, while the benchmark Sensex fell 0.09% to close at 32,370.04 points.