US-based eFunds has signed a definitive agreement to acquire the India Switch Company (ISC), a provider of payments processing and managed ATM services, from retail banking firm HMA Data Systems for a maximum consideration of $20 million.
The initial cash purchase price is $17.5 million, subject to working capital adjustments and holdback arrangements. EFunds says an additional maximum payment of $2.5 million may be made approximately one year following closing, if the business achieves certain revenue objectives during that period.
ISC operates India's Bancs and Bancs interchange networks in India and also provides outsourced ATM management services to banks in 20 cities around the country. The firm has operating centres in Mumbai and Chennai.
EFunds says the acquisition provides it with an established customer base in the Indian payment systems sector. The vendor has recruited Noshir Kathok, an EFT industry veteran with 30 years of experience, to head its business development activities in India.
Atul Kunwar, MD, eFunds, India, says: "This acquisition is a significant step in the execution of our long term strategic plan for eFunds' India business."
EFunds is the latest in a number of fintech firms looking to tap the Indian market. In November last year Fundtech acquired CashTech Solutions, an Indian provider of cash management and electronic banking software, while Euronet has secured a number of payments processing deals with banks across the country.
According to Indian press reports a number of firms are also looking to acquire stakes in HMA Data Systems as well as Chennai-based electronic banking vendor Financial Software & Systems (FSS) in order to gain a foothold in the market.