‘Unfulfilled conditions’: Prosus axes $4.7-bn BillDesk takeover

Dutch client web conglomerate Prosus NV, the mother or father of fintech firm PayU India, stated Monday it has terminated the settlement to amass Mumbai-based cost aggregator BillDesk. The $4.7-billion deal, introduced final August, would have turn into the most important fintech M&A deal in India if it had gone by means of, and proposed to merge BillDesk with PayU India.

Notably, the businesses had acquired the CCI’s nod solely final month. However, sure approvals, together with that of the RBI, have been nonetheless pending.

“Closing of the transaction was subject to the fulfilment of various conditions precedent, including approval by the Competition Commission of India (CCI). PayU secured CCI approval on 5 September 2022. However, certain conditions precedent were not fulfilled by the 30 September 2022 long stop date, and the agreement has terminated automatically in accordance with its terms and, accordingly, the proposed transaction will not be implemented,” Prosus stated in a press release.

“Prosus has been a long-term investor and operator in India — investing close to US$6 billion in Indian technology companies since 2005. Prosus remains committed to the Indian market and growing its existing businesses within the region,” it added.

The firm didn’t element the unfulfilled circumstances that led to the deal’s termination. Asked concerning the circumstances, a Prosus spokesperson wrote in an e-mail, “I’m afraid there is nothing more that we can say beyond what is in the statement.” The Indian Express reached out to BillDesk co-founder MN Srinivasu however he didn’t reply.

According to sources, sure traders of BillDesk are exploring choices to contemplate a authorized recourse in opposition to the deal being terminated by Prosus. “There are concerns over confidential BillDesk data that has been shared with PayU over the last year in anticipation of the acquisition,” one of many sources stated.

The all-cash deal was anticipated to offer an exit to BillDesk’s institutional traders — General Atlantic, Temasek Holdings, Visa, TA Associates, March Capital, and Clearstone Venture Partners — along with the three co-founders, who collectively held 29.6 per cent share within the firm.

Another supply stated the choice to terminate the deal was ratified by Prosus’ board of administrators and it was “a final decision”, indicating that the corporate doesn’t plan to pursue the deal beneath a brand new settlement.

On September 5, following the CCI approval, PayU India had stated that the transaction concerned “novel assessment by the CCI of dynamic digital markets”. “Prosus firmly believes that this acquisition of BillDesk will have significant pro-competitive benefits for the Indian economy and will strengthen the Indian digital payments market, which is fully regulated by the Reserve Bank of India (RBI). This acquisition by PayU of BillDesk is also consistent with the government of India’s Digital India mission and will benefit Indian merchants, government institutions and consumers,” PayU India CEO Anirban Mukherjee had stated.

Founded in 2000 by former consultants MN Srinivasu, Ajay Kaushal and Karthik Ganpathy, BillDesk is amongst India’s largest cost gateway aggregators, dealing with greater than half of all on-line billing transactions, in line with trade estimates.

Prior to the acquisition announcement final yr by Prosus, BillDesk had additionally been in talks with different fintech giants for a takeover, together with Paytm.

Payment aggregators like BillDesk primarily deliver collectively numerous cost techniques reminiscent of credit score or debit playing cards, netbanking, UPI, and wallets on a single platform for on-line retailers to supply to clients.

According to trade estimates, BillDesk and Paytm collectively managed an enormous chunk of India’s cost gateway site visitors. However, traders of BillDesk had been on the lookout for an exit within the face of rising competitors from, apart from Paytm, a number of gamers together with Infibeam, CCAvenue, PayU, and Razorpay. For the yr ending March 2021, the corporate reported a internet revenue of Rs 271 crore, or round $37 million, making it a first-rate goal for different funds companies trying to develop inorganically.

PayU is current in a number of cost segments — gateways, pockets, credit score companies — and even within the non-banking monetary firm (NBFC) house. Along the way in which, it has acquired or invested in a number of fintech start-ups, together with CitrusPay, ZestMoney, PaySense, and Wibmo.

According to Prosus, which is a division of the South African multinational Naspers, the acquisition of BillDesk was to present an enormous leg-up to PayU in India, with the post-deal group entity dealing with 4 billion transactions yearly — 4 instances PayU’s present stage in India.