Travel portal Yatra to accept Ebix proposal to takeover it of worth $336 Million

Key Highlights

Yatra going to accept Ebix Inc.’s proposal to acquire it for $336

Ebix’s offer price of $7per share represented a premium of 84% to Yatra.

Yatra gained a net profit of Rs 13.75 crore in the third quarter ended December 31, 2018

Travel portal Yatra Online Inc. said it will accept Ebix Inc.’s proposal to acquire the Nasdaq listed online travel company. In stock exchange filing Yatra also said it has come up with a confidentiality agreement with Ebix that will assist both the companies to initiate due diligence for the proposed acquisition. Yatra also said the confidential agreement doesn’t assure that deal will be successful from this process.

Earlier this week software firm Ebix has put a proposal to of $336 Million for the acquisition of Yatra in a cash-and-stock deal. Ebix has put this move to strengthen its grip in Indian travel ventures.  US-headquartered Ebix wants to acquire Yatra to merge online travel portal of Yatra, with Ebix Cash subsidiary, which offers remittance services.

Ebix’s offer price of $7 per share represented a premium of 84% to Yatra’s closing price on recent Friday. The offer valued Yatra at around 50% premium to its valuation at the time of its Nasdaq listing in 2016. 

In July 2016, Yatra signed a reverse-merger agreement with Terrapin 3 Acquisition Corp a US-based special purpose acquisition company 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.

Yatra came live in the market in 2006 by Sabina Chopra, Dhruv Shringi and Manish Amin. These were former executives of Ebookers Group (UK). It functions in India through Gurugram-based unit Yatra Online Pvt. Ltd. The company is backed by several private equities, strategic investors and private equity firms including Intel Capital, Reliance Industries Ltd, Vertex Venture Management, Norwest Venture Partners and IDG Ventures.

The Gurugram unit of the company reported a net profit of Rs 13.75 crore in the third quarter ended December 31, 2018, as compared to Rs 23.23 crore the previous year. The company’s revenue also dropped to Rs 220.47 crore from Rs 336.04 crore. 

Ebix an Atlanta based company offers software and e-commerce services for financial, healthcare and insurance industries. It subsidiary Ebix Cash is expanding its business in the travel division focused on sport, luxury, and event-related travelers. It has acquired Delhi-based Leisure Corp, Mumbai-based Mercury Travels and Via an online-to-offline travel agency to put a grand entry into the Indian travels industry.

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Himanshu Gupta

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