SUMMARY
The transaction implies an enterprise value of $337.8 Mn
Yatra will become part of EbixCash travel portfolio
On March 11, Ebix had offered an acquisition deal worth for $336 Mn
Signalling the culmination of the long-drawn merger process, US-based software company Ebix and Gurugram-based travel and ticket booking platform, Yatra Online have signed a definitive agreement for a merger.
For the merger, each ordinary share of Yatra will be entitled to receive 0.005 shares of a new class of preferred stock of Ebix. Each share of Ebix Convertible Preferred Stock received for each Yatra Ordinary Share will, in turn, be convertible into 20 shares of common stock of Ebix. Ebix will be issuing 243,747 convertible preferred stock, which in turn will be convertible into 4,874,931 shares of Ebix common stock.
Assuming a value of $4.90 per Yatra Ordinary Share, the transaction implies an enterprise value of $337.8 Mn at the Ebix collar price of $59 per share. Post adjustment for indebtedness, working capital, warrants to be converted and minimum cash requirement, it will have a net equity value of $239 Mn.
Robin Raina, chairman, president and CEO, Ebix said, “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.”
Following the completion of the transaction, Yatra will become part of Ebix’s EbixCash travel portfolio alongside Via and Mercury and will continue to serve customers under the Yatra brand. With this, the company believes that, they will be India’s largest and most profitable travel services company, and a leading online travel platform poised to capture significant international growth opportunities.
Dhruv Shringi, cofounder and CEO of Yatra Online, said, “As part of a larger diversified organization with the necessary scale and resources to be a leader in today’s dynamic travel marketplace, we will provide more options and an enhanced experience for our joint customers and will be an even stronger partner to the airline, hotel, car rental and other businesses we work with.”
On March 11, Ebix had offered an acquisition deal worth for $336 Mn (INR 2,342 Cr) in a cash-and-stock deal to Yatra.
This is not the first acquisition deal for Ebix in the online travel segment. In 2017, it acquired Bengaluru-based omnichannel online travel and assisted ecommerce exchange, Via.com.
Yatra was founded in August 2006 by Sabina Chopra, Manish Amin, and Dhruv Shringi. The company offers travel-related services such as domestic and international air ticketing, hotel booking, homestays, holiday packages, bus ticketing, rail ticketing, activities, attractions and ancillary services.
The company announced its financial results for the third quarter of FY19. It reported a 7% improvement in its quarterly revenue and a nearly 60% yearly control on its losses.
The companies said the merger would accelerate the growth potential in this business and create the world’s leading end-to-end enterprise financial and insurance services provider. It would also create India’s largest financial and travel Ebix Cash exchange.
