Private equity funds Blackstone Group and Bain Capital are negotiating to buyout the Automated Teller Machines business of Euronet Worldwide in India to benefit from rising use of electronic transactions, said three people familiar with the discussions.
The business, which Euronet classifies under the so-called Electronic Financial Transaction segment, is facing profitability pressures due to steady climb in costs, they said preferring anonymity. It is the biggest third-party operator of shares ATMs across the nation.
Euronet, the Nasdaq listed firm, had in the past sold a similar business in the UK to Bridgepoint Capital for $30 million. The India business, where it operates more than 1,300 ATMs, could be valued as high as $250 million, those people said.
Blackstone, Bain and Euronet did not respond to mails seeking comment on the potential sale. There is no certainty that the transactions would be completed.
“The company is looking for buyers for ATM outsourcing and deployment business while they will retain their switching operation,” said one of the persons. “Both switch and ATM business contributes 50% each to the revenue.”
Euronet has been facing profitability pressure with it announcing a 2% rise in revenues from the EFT business at $199 million for 2011 and a 13% decrease in operating profit of $33.2 million, according to its website. With a substantial portion of the business of ATMs coming from India, it plans to sell the unit, the people said.
Source: Economic Times