Prosus doubles down on India with $4.7 bln deal for BillDesk

A brand of Prosus is diplayed at Amsterdam’s inventory exchange making as Prosus begins buying

A brand of Prosus is diplayed at Amsterdam’s inventory exchange making as Prosus begins buying and selling on the Euronext stock exchange in Amsterdam, Netherlands, September 11, 2019. REUTERS/Piroschka van de Wouw/File Picture

  • Prosus suggests BillDesk will complement its PayU company
  • Prosus shares increase 5%
  • BillDesk processed $92 bln of payments in year ended March 31
  • Analysts say selling price tag is significant but significant progress to come

AMSTERDAM, Aug 31 (Reuters) – Prosus NV (PRX.AS) doubled down on its financial investment in India on Tuesday with a $4.7 billion deal for payments system BillDesk, building it one particular of the greatest players in the country’s quickly-developing fintech sector.

Prosus, Europe’s reply to SoftBank (9984.T) and its Eyesight Fund, said BillDesk will enhance its personal PayU enterprise, which operates in India, Latin America and Europe.

India has been a significant aim for Netherlands-primarily based Prosus but the BillDesk deal is its greatest financial investment there to day.

“This is truly a transformative transaction for PayU and its posture as a single of the primary payment and fintech companies in India and really in the earth,” Prosus CEO Bob van Dijk claimed on a media connect with.

Prosus shares were up 5.1% at 73.96 euros by 1448 GMT.

Prosus, which was spun out of Naspers (NPNJn.J) of South Africa in 2019, owns stakes in client world wide web organizations in on the web marketplaces, academic software, food items supply and fintech.

Most effective recognized for its 28.9% stake in Tencent(0700.HK) of China, Prosus is betting that its extended-term investments can fill a yawning valuation hole and give it the identical title recognition as 1 of the world’s most aggressive engineering traders. read through additional

The speedy development of the payments field worldwide has been helped by climbing need for the duration of the pandemic.

PayU processed $55 billion in payments in the 12 months finished March 31, 2021, a 51% enhance on the previous calendar year.

BillDesk processed $92 billion of payments in the exact same period. It produced a web earnings of 2.71 billion Indian rupees ($37.05 million) for the year ended March 31 2021, suggesting an acquisition rate of more than 100 times earnings.

PayU CEO Laurent le Moal defended the selling price tag, arguing it makes sense supplied the fast growth in BillDesk’s marketplace, its management posture, its recent financial gain margins and the prospective for the merged businesses to enter adjacent marketplaces.

“The cost paid out appears to be rather hefty at about 20 situations revenues but there ought to be significant synergies in combining the two organizations, as nicely as very higher development to arrive, provided the attractiveness of the Indian payment industry,” mentioned ING analyst Marc Hesselink in a notice.

The offer to purchase BillDesk, which was launched in 2000, is topic to regulatory approvals, including by the Competition Fee of India.

Prosus stated Tuesday’s acquisition provides the total it experienced invested in the Indian current market to more than $10 billion.

Prosus was suggested by PJT Partners of the U.S. and Avendus of India. BillDesk was advised by Morgan Stanley.

($1 = 73.1500 Indian rupees)

Reporting by Toby Sterling Modifying by Mark Potter, Edmund Blair and Susan Fenton

Our Expectations: The Thomson Reuters Trust Concepts.