German payments company Wirecard will buy the payments business of Great Indian Retail Group, a major Southeast Asian electronic payment and ecommerce business, according to Reuters. Wirecard will pay $254 Mn in cash, financed by its own capital and committed bank loans for 60% of the shares of GI Technology, part of Great Indian Retail Group and an issuer of prepaid cash-card, mobile-wallet and remittance technology.
With the acquisition, Wirecard will take over more than 900 staff in India, the Philippines, Indonesia and Malaysia as part of the deal, which includes the iCASHCARD, Smartshop, StarGlobal and Commerce Payment brands of Great Indian Retail Group.
iCASHCARD is accepted in over 10,000 ecommerce sites in India such as Flipkart, SnapDeal, IRCTC, BookMyShow, AirAsia and eBay. As per Wirecard, the businesses it is buying are expected to achieve earnings before interest, tax, depreciation and amortisation (EBITDA) of more than $7.7 Mn this year and up to $19.8 Mn next year after integration costs. Sales are seen at $49.5 Mn and expected to be more than $82.5 Mn in 2016.
GI Technology provides hundreds of thousands of Indians without bank accounts the ability to use cash for online payments or money remittance. Its cash cards can be topped up at banks, local stores or by mobile phone. Earlier, Wirecard had been reported to be in the race to buy British payments processing company Worldpay, which instead went public this month in a London listing that valued the business at $7.4 Bn.
In India, the payments sector is seeing a lot of investor interest and activity in recent times. Last month, Paytm, another big player in this segment reportedly raised $680 Mn from Chinese ecommerce giant, Alibaba Group Holding for a 20% stake. This month, Mumbai based payment solutions company, Citrus Payment Solutions, has raised about $25 Mn from a group of new and existing investors. Similarly, another online payment gateway Razorpay, incubated at Silicon Valley’s based startup accelerator Y Combinator, raised $9 Mn (INR 58 Cr) in a round led by Tiger Global and Matrix Partners.
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