Ebix signs pact to acquire Yatra, plans EbixCash IPO

By TEAM VCC

  • 17 Jul 2019
Credit: 123RF.com

Software firm Ebix Inc. said on Wednesday it has signed a definitive agreement to acquire Nasdaq-listed Yatra Online Inc. in a deal aimed to boost its portfolio of Indian travel ventures.

US-headquartered Ebix said in a statement that the all-stock deal implies an enterprise value of $337.8 million (Rs 2,325 crore) and a net equity value of $239 million for Yatra. The enterprise value takes into account a company's debt, working capital and cash on the books.

Ebix offers software and provides e-commerce services for the insurance, financial, healthcare industries. It had first offered to acquire Yatra Online, which operates travel portal Yatra.com, in March. 

Previously, its unit EbixCash had acquired Mumbai-based Mercury Travels and Delhi-based Leisure Corp last year to create a travel division focused on luxury, events and sports-related travelers.

In October 2017, Ebix had acquired online-to-offline travel agency Via for $75 million.

Yatra will also become part of the EbixCash travel portfolio alongside Via and Mercury. It will continue to operate under the Yatra brand, 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," said Ebix chairman, president and CEO Robin Raina. Currently, MakeMyTrip Ltd is India's biggest online travel services company.

Raina also said that Ebix is planning an initial public offering of EbixCash. In a separate statement, Ebix said its board has approved the process of appointment of up to five investment bankers for the IPO with a targeted timeline of the second quarter of 2020.

The company said it is in advanced stages of selecting the bankers and that it will reveal the details of the IPO in terms of the targeted money raise in due course.

Dhruv Shringi, co-founder and CEO of Yatra, said the deal with Ebix provides its shareholders with the opportunity to participate in the upside potential of one of the fastest-growing multinational on-demand software and e-commerce services companies in the world.

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.

Ebix’s acquisition spree

The firm had hit the headlines in India in mid-2017 after it acquired digital payments company ItzCash for $120 million and followed it up with the buyout of Via. Since then, it has snapped up a number of other companies.

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 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.