France-based payments firm Worldline SA said it has entered into a definitive agreement to acquire Chennai-based point-of-sale (PoS) technology service provider MRL PosNet Pvt. Ltd for €89 million (about $105 million).
The transaction will help Worldline acquire a strong customer base of banks in southern India, the company said in its statement.
“This acquisition presents an important milestone in the execution of the Worldline Group’s strategy in India, as it will reinforce the Group’s existing business with a highly complementary asset,” it said.
Worldline CEO Gilles Grapinet said the company aims to help Indian banks and merchants move towards digital payments through a low-cost payment terminal sourcing adapted to the local market needs and an efficient terminal management solution.
MRL PosNet was founded in 2008 by Kishore K Kothapalli, who previously worked in the retail and real estate sectors.
Worldline said it retain MRL PosNet’s top management and key staff including the founder and CEO.
MRL PosNet operates a terminal management platform and claims it processes payment transactions on behalf of 18 Indian banks by managing 100,000 payment terminals. It employs about 140 engineers.
According to credit ratings firm ICRA, MRL PosNet's operating income jumped from Rs 41.4 crore in 2015-16 to Rs 125.7 crore in 2016-17. Profit after tax rose from Rs 1.5 crore to Rs 10.9 crore.
The company benefitted from a rise in demand for PoS terminals after the Indian government banned old high-value banknotes in November last year as part of efforts to limit cash transactions and increase digital payments.
Worldline also said that it will finance the transaction with cash in hand and that the deal is likely to be immediately margin accretive. The transaction is likely to close before the end of this month.