Paytm is ready to buy rival digital payment platform FreeCharge as it has signed a non-exclusive term sheet to acquire it. It is set to buy this Snapdeal-owned company, in what is expected to be an all-cash deal.
According to people who are closely associated with the developments, Paytm will begin the financial and commercial due diligence of FreeCharge next week. They also said that the deal, estimated at between $45 million and $90 million, could be finalised in a month, if all the proceedings are successful.
Paytm is gearing to raise up to $1.9 billion in fresh funding from Japan’s Soft-Bank, that could value it between $8 billion and $9 billion.
For Snapdeal, selling its payments will provide much-needed relief to the troubled online marketplace. Softbank, Snapdeal’s largest stakeholder, is currently negotiating the company’s sale to rival firm Flipkart.
As per sources, the company has initiated contact with global payments giant PayPal, which had earlier come close to picking up a majority stake in FreeCarge.