Ebix makes $336 million bid for Yatra.com, plans expansion in Indian market

Ebix makes $336 million bid for Yatra.com, plans expansion in Indian market

Mumbai, Mar 12: US-based software firm Ebix has made an offer to acquire Yatra.com for $336 million in order to expand its presence in the fast growing Indian travel market.
Ebix, which in recent months made a slew of acquisitions in the leisure and corporate travel segment, submitted its bid to the board of Nasdaq-listed Yatra Online outlining its offer. Ebix offered to pay $7 per share to acquire 100 per cent of outstanding stock of Yatra Online and the offer price constituted 84 per cent premium to its closing price of $3.80 as on March 8. Ebix intends to merge Yatra Online into its Indian EbixCash subsidiary, it said.
Yatra.com was founded by Dhruv Shringi, Manish Amin and Sabina Chopra in 2006 and counted Reliance Capital and Norwest Venture Partners as its early investors. It listed on Nasdaq following a reverse merger with Terrapin in 2016. But low margins and high marketing spends in the highly competitive travel space in India led to losses and cash flow issues.
Recently, Yatra.com acquired a Chennai-based corporate travel services firm PL Worldways to boost presence in the segment and also decided to outsource non-core activities. But profits have eluded the firm (it made Rs 13.7 crore profit in December-end quarter 2018) and sources say the management has been on the lookout for investors for the past few months. Yatra.com did not immediately react to the offer.
Ebix’s offer is subject to due diligence and customary regulatory and other closing conditions, it said.
The offer contemplates the assumption of all Yatra Online receivables, cash and restricted cash worth at least $25 million at the time of closing and other assets, with all liabilities being paid for by Yatra Online concurrent to the closing of the transaction.
Ebix said it would pay for Yatra Online either in cash or by issuing freely-tradeable Ebix stock. Ebix also said it may reduce the offer it if does not receive positive response from Yatra’s board and also reserves the right to withdraw the offer if it is not allowed to proceed with due diligence by March 18.