Hitachi acquires Sequoia-backed Prizm
Hitachi will acquire all issued equity of India’s Prizm Payment Services from Sequoia Capital, Axis Bank and other shareholders. Financial terms of the deal were not disclosed.
Launched in 2008, Prizm is a provider of payment services using ATMs and point-of-sale (POS) systems to banks and financial institutions in India. It has also partnered with Mswipe Technologies and Axis bank to provide mobile POS services to merchants. As of March 31 2013 the company has revenues of around INR5 billion ($80.2 million)
According to AVCJ Research, Sequoia invested $10 million in the company in 2008, followed by another $8 million round in 2011.
The Carlyle Group was reported to be in exclusive talks to acquire Prizm last year for $225-250 million, which is equivalent to 2.5-3 times its turnover in 2010.
Hitachi aims to accelerate global development of its IT services businesses targeting financial institutions. It claims to have top share of the Japanese ATM market.
In India, non-financial institution service providers are expanding their ATM outsourcing business, providing banks and financial institutions with comprehensive services, extending from deploying the ATMs as its own assets, managing the cash-in-transit services, to managing, monitoring and maintaining ATM operations.
The number of ATMs in India is projected to nearly triple in number over the next four years from around 100,000 in 2012. Meanwhile, financial institutions are working to roll out mobile device-based payment services.
"By becoming a member of the Hitachi Group, we are excited to capture synergies from the combination of Prizm Payment Services' robust customer base and know-how in India, and the Hitachi Group's expertise in IT services for financial institutions built up in Japan and around the world as well as its advanced technological capabilities, including cash recycling ATMs," Loney Antony, managing director at Prizm said in a statement.
Prizm expects the deal to give it faster and easy access to new markets as well as access to Hitachi's global customer base.
The deal is expected to close by the end of February 2014, subject to regulatory approvals.
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