Software firm Ebix Inc said on Monday that it has offered to acquire fellow Nasdaq-listed company Yatra Online Inc for $336 million (around Rs 2,350 crore) in a cash-and-stock deal aimed at boosting its portfolio of Indian travel ventures.
US-headquartered Ebix said in a statement that it intends to merge Yatra Online, which operates travel portal Yatra.com, with its Indian EbixCash subsidiary, which offers remittance services.
"We believe that Yatra Online’s products and services are complementary to EbixCash’s travel portfolio of Via and Mercury; and a combination of the two companies would lend itself to significant synergies and the creation of the India’s largest and most profitable travel services company,” said Ebix chairman, president and chief executive Robin Raina.
Ebix said the offer price of $7 per share represented a premium of 84% to Yatra’s closing price on Friday. It expects the deal to add between 25 to 30 cents for the shareholders of the combined company. The offer also values Yatra at around 50% premium to its valuation at the time of its reverse-merger to list on the Nasdaq in 2016.
Ebix said it might reduce its offer if it does not receive a positive response from Yatra's board. It also reserved the right to withdraw the offer if Yatra declines to allow the company to proceed with due diligence by March 18.
Yatra has not issued any statement with regard to the offer. Its shares rose 15% after the news, while Ebix shares were up marginally on Monday.
Atlanta-based Ebix offers software and provides e-commerce 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.
Ebix had in October 2017 acquired online-to-offline travel agency Via for $75 million.
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.
Yatra reported a net profit of Rs 13.75 crore in the third quarter ended December 31, 2018, as compared to Rs 23.23 crore in the year-ago period. The company's revenue slipped to Rs 220.47 crore from Rs 336.04 crore during the period under review.
Ebix’s acquisition spree
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. In an interaction with VCCircle around that time, Raina had said the company would acquire more companies and that its India business could touch $500 million in three years. It has since snapped up a number of ventures.
In February, Ebix acquired 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 60% stake in Indian e-learning company Smartclass for $8 million (Rs 52 crore) in April.