SUMMARY
• With the acquisition, Indus will be tightly integrated into Ebix’s Financial Exchange EbixCash offering in India and abroad
• After the acquisition, Ebix believes that the business can continue to grow at the rate of 12% to 15% plus annually with operating margins of 30% or more, once fully integrated
• The acquisition of Indus will increase the employee strength of Ebix in India by 900 to approximately 7,200 employees
After entering Indian e-learning market with the acquisition of Smartclass, ItzCash parent Ebix has acquired Pune-based Indus Software Technologies Pvt. Ltd. (Indus), a global provider of enterprise Lending software solutions to financial institutions, captive auto finance and telecom companies, for approximately $29 mn including $5 mn of contingent earn-out.
With the acquisition, Indus will be tightly integrated into Ebix’s Financial Exchange EbixCash offering in India and abroad, with key Indus business executives becoming an integral part of the combined EbixCash senior leadership.
The acquisition of Indus will increase the employee strength of Ebix in India by 900 to approximately 7,200 employees.
In FY17, Indus posted revenues of $22 mn and EDITDA of approximately 17%. With the acquisition, Ebix believes that the business can continue to grow at the rate of 12% to 15% plus annually with operating margins of 30% or more, once fully integrated.
At the same time, Ebix expects the acquisition to be immediately accretive to its earnings and forecasts $0.19 in increased Diluted EPS, once the acquisition is fully integrated over the next 6 months.
On the investment, Ebix Chairman, President and CEO Robin Raina said, “Indus provides us now with the ability to interface a Person to Person (P2P) Lending exchange into the back-end systems of top lenders in the market place and move data seamlessly across front-end and back-end systems. Indus also fits in well with our goals of expanding the EbixCash network globally, since it provides us with an international customer base across Europe, Middle East and South-East Asia.”
Founded in 1990, Indus offers a specialised suite of products and technology solutions for Banking & Finance, Telecom and Insurance Industries. With more than 150 enterprise lending implementations in 15 languages across 50 plus countries, Indus derives 56% of its revenues from India and the balance coming primarily from Europe, Middle East and South-East Asia.
With enterprise solutions that are designed for international markets, Indus has a customer base of global blue-chip customers and partners including Standard Chartered Bank, Volvo, Exide Life insurance, Idea, and Airtel etc.
Ebix expects that the acquisition will also allow Indus clients to access the more than 260K physical distribution expanse of EbixCash, along with our strong corporate and electronic network, and be a lending provider to our vast consumer network in India, through a future EbixCash P2P Exchange.
The Company’s solution set includes functionalities like Commissions & Incentives, Workflow management, Mobility, Lead management, Collateral management, Dealer Funding etc. besides its end-to-end Lending suite.
Built on modern J2EE database independent architecture that can easily be ported to any handheld device, Indus solutions can be implemented as an integrated end-to-end solution or as independent modules capable of interfacing with legacy or existing host systems.
Ebix: Strengthening Presence In India
With 40 offices spread across Australia, Brazil, Canada, New Zealand, Singapore, the US, India and the UK, Ebix provides end-to-end software and ecommerce solutions to clients in different verticals, including insurance, finance, healthcare and e-governance. It assists companies in building infrastructure exchanges, front- and back-end enterprise frameworks and risk compliance systems.
Ebix also offers SaaS-based software development solutions, support and consultancy to clients on six continents. As claimed by its spokesperson, the company has conducted in excess of $100 Bn in insurance premiums annually on its platforms.
Launched in 2006, EbixCash, an Ebix Group initiative, is a financial exchange operating in India. With an expansive presence that combines 231.5K physical distribution outlets and an omnichannel online digital platform, EbixCash has established an enterprise financial exchange portfolio spread across money remittance (domestic and international), travel, prepaid and gift cards, utility payments, etc.
The company claims to have a domestic remittance volume of approximately $100 Mn per month. It currently processes up to 600K transactions per day and approximately $2 Bn in annual payment volume.
EbixCash, through its travel portal Via.com, also has a presence in the Southeast Asian online travel sector, with over 110K distribution outlets and 8,000 corporate clients and more than 24.5 Mn yearly transactions.
Earlier, Ebix acquired an 80% stake in ItzCash in May 2017. The funding, which was done at a valuation of $150 Mn, allowed Ebix to assume majority shareholder status in ItzCash. As part of the deal, existing investors Matrix Partners, Lightspeed Venture Partners and Intel Capital exited for returns between 3X-5X.
At the time, it was reported that Ebix was looking to foray into areas such as credit, insurance, healthcare and investments to accelerate growth momentum. Having reportedly deployed 25,000 point-of-sale machines in the last few months, the company now intends to deploy 100K POS machines by the end of 2017.
Earlier this year, Ebix also acquired Money Transfer Service Scheme (MTSS) business of Transcorp International. As per the official statement, the acquisition has been made through one of its Indian subsidiaries, EbixCash, for around $7.4 Mn.
With the latest acquisition, Ebix looks ready to strengthen its presence in the Indian market.
