EbixCash Acquires Essel Forex for US$8 Million

Ebix (NASDAQ:EBIX) announced that its EbixCash World Money subsidiary in India has entered into an agreement to acquire 100 percent assets of Essel Forex for approximately US$8 million.

As quoted in the text release:

With a national network of 44 branches in 31 cities serviced by 400+ employees, Essel Forex has been one of the five largest Foreign exchange providers in India with a wide spectrum of related products including sales of all major Currencies, travelers’ checks, demand drafts, remittances, money transfers and prepaid cards primarily for the Corporate clients. Besides being a foreign exchange business partner to leading banks such as ICICI, Axis, Indus Ind, Yes and HDFC Bank, Essel Forex has been associated with Western Union and MoneyGram for inward money transfers.

Essel Forex will be tightly integrated into the EbixCash Financial Exchange offering in India and abroad. The retained Essel Forex executives will become an integral part of the combined EbixCash remittance and forex leadership team headed by EbixCash World Money Managing Director TC Guruprasad. Ebix believes the Essel Forex business can generate operating margins of 40% or more, once fully integrated. Ebix expects the acquisition to be immediately accretive to its earnings.

The acquisition of Essel Forex following the recent announcement of the Weizmann acquisition, further strengthens EbixCash’s position as the largest Financial Exchange in India, besides being the undisputed leader in the inward remittance, outward remittance and foreign exchange markets in India.

“Essel Forex has a rich focus on the corporate clientele with strong partnerships with many leading banks,” said Ebix Chairman, President and CEO Robin Raina. “Their geographical, product and client overlap with EbixCash made the synergies rather compelling. We remain committed to establishing the Indian sub-continent’s largest Financial exchange and this is another step in that direction.”

“As part of the next phase of growth of Essel Finance, we have decided to focus more on the fund based activities such as NBFC, HFC and Asset Management actives such as Mutual Fund, Private Equity and accordingly we are exiting the transactional business,” said Amitabh Chaturvedi, MD & CEO Essel Finance. “The sale of Essel Forex’s business to Ebix Cash WorldMoney is a part of that strategy.”

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