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Friday, 04 January, 2019, 20 : 20 PM [IST]

EbixCash strengthens leadership position in India with acquisition of Weizmann Forex

EbixCash World Money Limited, the India subsidiary of Ebix, InC., has entered into an agreement to acquire a 74.84% controlling stake in Weizmann Forex Limited. Weizmann Forex is the second largest inward remittance provider besides being one of the four largest foreign exchange & outward remittance providers in India. The purchase values 100% of Weizmann Forex at USD 65.94 million, net of USD 17.51 million of cash remaining in the business. Ebix will be funding the entire transaction in cash, using its existing bank line and internal cash reserves.

EbixCash has also made a public offer to acquire the remaining 25.16% of Weizmann Forex shares for INR 528 (USD 7.54) per share, in adherence to SEBI rules, or approximately USD 21.12 million to public shareholders.

Weizmann will be tightly integrated into the EbixCash financial exchange offering in India and abroad. The retained Weizmann executives becoming an integral part of the combined EbixCash remittance and forex leadership team headed by EbixCash World Money Managing Director, TC Guruprasad.

Commenting on this development, Robin Raina, Chairman, President and CEO, Ebix, said, “Weizmann has one of the largest financial exchange footprints in India, especially with a large number of banks servicing their transactions through their network. We are excited to bring this vast network into the EbixCash Financial exchange network. The synergies between Weizmann and EbixCash were compelling making this a natural decision for us.”

B. Karthikeyan, Managing Director, Weizmann Forex, said, “Weizmann Forex has seen sustained growth in 2018 across its business verticals and has risen to ET’s top 200 companies’ list. However, every business must continue to evolve to be relevant and we are proud to associate with Ebix and leverage our synergies to help the business continue to grow and innovate. We look forward to a fruitful future with Ebix.”

Ebix intends to consolidate Weizmann into its financial exchange operations, expanding its market leadership, while also enabling significant synergies and enhanced operating efficiency for the combined EbixCash inward remittance operation.

For the year ended March 31, 2018, Weizmann reported gross revenues of USD 1.1 billion, representing approximately USD 23 million of net revenues from the perspective of Ebix. Ebix believes the Weizmann business can continue to achieve annual growth of 15% or more, with operating margins of 40% or more, once fully integrated. Ebix expects the acquisition to be immediately accretive to its earnings. Once fully integrated within approximately six months, Ebix expects it to contribute at least 15 cents per share in additional diluted EPS over a 12-month period.

The Weizmann network encompasses over 700 districts in India, 186 branches, 21 airport counters at 7 international airports, and more than 61,000 customer touch points across the country. It services leading multinationals, large corporate entities, public sector undertakings, banks, large tour operators and retail clients.

This Weizmann acquisition also complements EbixCash’s travel exchange offering, enabling the cross selling of forex and travel services within the organisations. It expands EbixCash’s presence from 25 to 32 international airports in India, exposing it to a broader base of global travelers while supporting recurring EbixCash World Money Forex Exchange business. The existing EbixCash World Money business had an approximate 70% share of India’s airport foreign exchange market. The company is also in the process of initiating contracts with a number of international airports outside India in countries like UAE.

 The addition of Weizmann expands the EbixCash Financial Exchange footprint from 260,000 physical distribution outlets to 320,000 outlets country-wide.

 Weizmann’s corporate business is highly synergistic with EbixCash’s existing corporate business, as it now provides EbixCash the ability to sell Digital Forex and multicurrency cards etc. to its existing thousands of corporate clients. EbixCash’s existing corporate clients are presently provided a variety of offerings including utility payments, corporate gifting, cash management, tele-medicine for employees, travel bookings, and prepaid gift cards etc.

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