Nasdaq-listed Ebix today said it will acquire the money transfer service scheme (MTSS) business of BSE-listed Paul Merchants for about USD 40.7 million through its Indian affiliate.
As a part of the transaction, Paul Merchants will take a 10 per cent stake in Ebix's combined international remittance business entity in India -- You First Money Express (YME) -- for cash consideration.
The agreement, which has been approved by Paul Merchants' Board, is subject to its shareholders and/or other regulatory/commercial approvals, it added.
Ebix's ItzCash service sees a domestic remittance volume of about USD 100 million per month.
"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," it added.
Ebix Chairman President and CEO Robin Raina said Sat Paul Bansal, the founding CMD of Paul Merchants, has agreed to serve as the Chairman of the Board of the combined remittance company.
According to a BSE filing by Paul Merchants, its income from the MTSS business was Rs 23.27 crore, or 70.5 per cent, of its total income for the fiscal ended March 2017.
The filing added that the business transfer consideration shall be Rs 262.77 crore subject to adjustments on closing as detailed under the Business Transfer Agreement.
"Slump sale of MTSS business shall allow the management of the company to focus on other businesses...It shall also provide means to the management to expand its existing business or invest in other opportunities for better growth," it added.
The company also plans to enhance its equity stake in its group company, Paul Fincap that is engaged in the business of gold loan and PPI business, Paul Merchants added.
Set up in 2013, YME had a turnover of Rs 53.61 crore for the fiscal 2016-17. It has been engaged in MTSS and other business activities since August 2015.
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