US-headquartered software firm Ebix Inc has entered into a definitive agreement with Yatra Online Private Limited to acquire the latter in a cash and stock transaction.
In a statement, Yatra said that the acquisition will give it an enterprise value of $337.8 million (Rs 2326.86 crore at current exchange rates). This also marks the largest acquisition for Ebix in terms of ticket size till date.
Ebix arrived at this figure by valuing each share of Yatra at $4.90 a piece, which was the closing price of Yatra on March 8, 2019, the last trading day before Ebix mde the offer. The share value represented a 32 percent premium over the closing share price on the said date.
However, after adjusting for debt, working capital and conversion of warrants and factoring in for minimum cash requirement, the transaction will eventually amount to $239 million (Rs 1645.32 crore) in an all stock transaction.
Yatra will continue to remain and operate as an independent brand, as part of the terms and conditions of the deal.
"The acquisition of Yatra would lend itself to significant synergies and the emergence of EbixCash as India’s largest and most profitable travel services company, besides being the largest enterprise financial exchange in the country…….. We are excited by the cross-selling opportunities that this combination provides us, while further strengthening our future EbixCash IPO offering,” Robin Raina, chairman, president and CEO of Ebix said.
The agreement comes a little over four months after Ebix had offered to buy Yatra for $336 million (around Rs 2,350 crore then) in a cash-and-stock deal aimed at boosting its portfolio of Indian travel ventures.
Subsequently, in the same month, Yatra said it has entered into a confidentiality agreement with Ebix that would enable both the companies to commence due diligence for the proposed acquisition.
For Ebix, this would mark the seventh acquisition as part of its efforts to expand its corporate travel portfolio business in India.
Atlanta-based Ebix offers software and provides ecommerce services for the insurance, financial, healthcare industries. Its unit EbixCash had acquired Mumbai-based Mercury Travels and Delhi-based Leisure Corp last year with an aim to create a travel division focused on luxury, events and sports-related travelers.
The firm had hit the headlines in India in mid-2017 after it had acquired digital payments company ItzCash for $120 million and followed it up with the buyout of Via for $75 million. In February this year, Ebix acquired an 80% stake in travel technology company Zillious Solutions Pvt. Ltd for an undisclosed sum. Last October, Ebix said it would buy Business Travels Pvt. Ltd to expand its Via travel business and pick up a 67% stake in Delhi-based Routier, a marketplace for trucking logistics.
The company's other recent investments include Centrum Direct Ltd, the foreign exchange services arm of Centrum Capital Ltd, which it bought for about $175 million (Rs 1,140 crore) last April. In July, it acquired Pune-headquartered lending software company Indus Software Technologies Pvt. Ltd for $29 million. The company also acquired a 60% stake in Indian e-learning company Smartclass for $8 million (Rs 52 crore) in April.
Yatra was founded in 2006 by former Ebookers Group (UK) executives Shringi, Manish Amin and Sabina Chopra. The company is backed by a number of venture capital, private equity and strategic investors including Mukesh Ambani-led Reliance Industries Ltd, Norwest Venture Partners, Intel Capital, IDG Ventures and Vertex Venture Management. It operates in India through Gurugram-based unit Yatra Online Pvt. Ltd.
In July 2016. Yatra had signed a reverse-merger agreement with US-based special purpose acquisition company Terrapin 3 Acquisition Corp, which was listed on the Nasdaq, paving the way for a back-door listing of the second Indian online travel services provider in the US after rival MakeMyTrip.