Hitachi to acquire Sequoia-backed payment solutions firm Prizm Payment
Japanese multinational engineering and electronics conglomerate Hitachi Ltd has announced that it has entered into a definitive agreement to acquire Chennai-based payment solutions firm Prizm Payment Services Pvt Ltd.
Hitachi will acquire the stakes of all of Prizm's shareholders, including Winvest Holdings (India), Sequoia Capital, Axis Bank and other minority shareholders. However, the financial details of the transaction are not disclosed. The companies expect to close the deal by February next year. Post acquisition, the senior management team of Prizm will stay. Winvest represented Prizm's promoters in the deal.
Last year, there were reports that Carlyle Group was in talks to acquire Prizm for about $225-250 million. NTT Group, another Japanese firm, was also looking to acquire a substantial stake in the company for around $128-160 million. However, the deals did not go through.
Hitachi said that it decided to acquire Prizm to accelerate its global development of IT services businesses targeting financial institutions, including ATMs where it has the top share in the Japanese market. It will use Prizm's customer base, and its technical know-how of cash operations as well as payment and management systems for financial institutions, to step up development of IT services business in India and globally.
"Being part of the larger Hitachi family provides an opportunity to expand our service offerings to customers, not just in India but across the globe. Furthermore, this deal provides the management team and employees tremendous potential for professional growth," said Loney Antony, MD, Prizm Payment.
Set up in 2008, Prizm has gained a foothold with its ATM deployments and has also partnered with MSwipe Technologies and Axis Bank to provide Swipeon, a mobile phone-based card acceptance service. In an interview with Techcircle.in last year, Antony had said that the firm was planning to set up 10,000-15,000 white label ATMs (WLAs) in two years after its official foray into the business in this financial year. As of March this year, Prizm had approximately Rs 500 crore ($80 million) revenues.
Tokyo-based Hitachi operates 11 business segments, including information & telecommunication systems, social infrastructure, high functional materials & components, financial services, power systems, electronic systems & equipment, automotive systems, railway & urban systems, digital media & consumer products, construction machinery and other components & systems. The company came to India in the 1930s. Currently, it has approximately 30 business bases and approximately 7,500 employees in the country. In addition to providing services in construction machinery and air-conditioning systems, the firm is expanding into information & telecommunication systems, power systems, industrial, transportation and urban development systems.
"Hitachi is endeavouring to strengthen IT services businesses in the fast-growing Asian region in particular. Having Prizm as Hitachi family, we believe that we can create new value together by wedding the company's strong customer base and payment service and other know-how in India, with Hitachi's IT expertise and strive to expand the Hitachi Group's IT services business in India and globally," said Hiroaki Nakanishi, president of Hitachi.
Commenting on the development, Mohit Bhatnagar, MD, Sequoia Capital, said, "Prizm's stellar management team have executed on a unique business model to emerge as a leading payments company in India. Prizm's success will be an inspiration for the next wave of startups seeking to build large enduring companies."
(Edited by Joby Puthuparampil Johnson)