South African media and internet conglomerate Naspers is set to acquire Citrus Pay for around $150-180 million, in an all-cash transaction, making it one of the largest deals in the Indian payments market, sources close to the development told.

With the combined entity, Naspers, which runs PayU and the Ibibo group in India, is expected to emerge as the leader in the online commerce space in terms of market share. Both Citrus and PayU focus on providing payment solutions to a growing tribe of merchants who operate online, and are largely business-facing in nature.

The acquisition talks, which have been ongoing over the past couple of months, were being led by PayU’s global CEO Laurent le Moal and Chief Financial Officer Aakash Moondhra, with the Citrus management.

Moal and Moondhra, who was earlier Snapdeal’s CFO, were in India to finalise the deal last week, sources said. PayU operates in India and 16 other emerging markets across Latin America, Europe, Asia and Africa. A person who did not want to be named said that Japan’s internet major Rakuten was also in discussions to acquire Citrus. However, the talks fell through.

Venture capital fund Sequoia Capital, an early investor in Citrus, which holds around 30% in the Mumbai-based company, is expected to make a healthy return of over 10-12 times on its investment.

The five-year-old Citrus has in all raised around $32 million in risk capital, unlike most other capital guzzling internet businesses, from the likes of Japanese investors Beenos and EContext. Investors collectively own around 50% in the company.

Less than a year ago, the payments startup scooped up $25 million from Sequoia and Ascent Capital. It had been in talks with potential investors to raise more capital before the acquisition finalised.

Founded in 2011 by Jitendra Gupta and Satyen Kothari, Citrus acts as a bridge between bank accounts of merchants and banks and credit card companies. While Rau, who came on board in 2014, and Gupta are both managing directors at Citrus, Kothari carved out the consumer-facing app business into a separate company — Cube, which he controls currently — earlier this year.

Source: The Times of India