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Hitachi buys Indian ATM deployer, processor Prizm

December 2, 2013

Hitachi is taking a stake in the Indian ATM market with the acquisition of Prizm Payment Services, a provider of ATMs and ATM payment services. The Tokyo-based company has entered into transfer agreements under which it will acquire all equity shares of Prizm currently held by investors that include Winvest Holdings Pvt. Ltd., Sequoia Capital, Axis Bank and other minority shareholders. 

In a news release, Hitachi said it sees India as an important region in its global strategy. The company aims to triple its revenues in India to 300 billion yen ($2.9 billion) by the fiscal year ending March 31, 2016, compared with the year ended March 31, 2012.

Hitachi decided to acquire Prizm Payment Services as a means to accelerate global development of its IT services targeted to FIs, including ATM hardware and software. The company intends to leverage Prizm's customer base (which includes major FIs), as well as its knowledge of India's payment systems, cash operations and management systems.

In India, the IT market is expected to grow rapidly, with some forecasts calling for an investment growth rate exceeding 10 percent from 2013 through 2017, driven by economic expansion. ATMs in particular are estimated to nearly triple in number in four years from the country's 2012 count of 100,000 as the result of the reserve bank's decision to allow white label ATM providers to serve the market.

"Hitachi is endeavoring to strengthen IT services businesses in the fast-growing Asian region in particular," said company president Hiroaki Nakanishi. "Having Prizm Payment Services 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."

Relative newcomer Prizm has made strides quickly in the Indian market with the support of investors. In September 2012, the company secured $189,000 in funding to help finance its commitment to the Reserve Bank of India to install and operate 23,000 ATMs within the next few years.

"Sequoia Capital is delighted to have partnered with Prizm when it was just a dream in the eyes of its founders," said Sequoia Capital managing director Mohit Bhatnagar. "Prizm's stellar management team have executed on a unique business model to emerge as a leading payments company in India. We are excited to see Prizm move to the next phase of its journey along with a global leader like Hitachi."

The share transfer is expected to be complete by the end of February 2014.

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