You are using an older browser version. Please use a supported version for the best MSN experience.

Itz Cash parent acquires Paul Merchants to become largest money transfer firm in India

LiveMint logoLiveMint 21-09-2017 Malvika Joshi

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 Pvt. Ltd (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. Its 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 at Ebix.

Even as Ebix Itz Cash is the largest domestic remittance firm in the country, handling a business volume of $100 million a month, 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 Itz Cash will have a market share of 60% as against 25% right now,” said Bhavik Vasa, chief growth officer at Ebix Itz Cash said.

Ebix is present in more than 40 countries including Australia, Brazil, Canada, India, New Zealand, Singapore, the US and the UK. It 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 Itz Cash as well. Itz Cash already has over 75,000 physical retail outlets. After the acquisition is completed, the outlets will number 114,000.

Itz Cash is a digital payment firm offering payment services like prepaid cards, money transfer and e-wallet to individual customers. The firm offers cash management solutions and payment processing services to companies. It also provides services like collection and disbursement management services to the government. Itz Cash 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. The benchmark Sensex fell 0.09% to close at 32,370.04 points.

More From LiveMint

image beaconimage beaconimage beacon