US based firm Ebix recently made an offer to Indian online travel agency Yatra.com for acquiring its assets at $336 million. The Atlanta headquartered company has been very rapidly expanding its network in the last 18 month and has acquired various entities ranging from travel to payment solution.
As per the proposal, Ebix proposed to a acquire 100% stake in Gurugram based Yatra.com at a share price of $7 per share. The offer price constituted 84% premium to its closing price of $3.80 as on March 8.
With the acquisition in place Ebix plans to merge Yatra.com into its Indian EbixCash subsidiary.
“Anybody who is in travel will have to look at Yatra. Yatra is one of the formidable players. They have a good brand equity, are the number one corporate player in the market. We have followed it very closely,” Ebix Chairman, President and Chief Executive Officer (CEO) Robin Raina commented on the proposal.
Yatra online is a Gurugram based online travel agency was started by Dhruv Shringi, Manish Amin and Sabina Chopra in 2006. The venture was initially funded by Reliance Capital and Norwest Venture Partners. The Nasdaq listed company has been grappling with low margins and high marketing expenditure in the highly competitive Indian travel market. This led to losses and cash flow issues in the company.
“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 would lend itself to significant synergies and the creation of the India’s largest and most profitable travel services company. We see substantial synergies, economies of scale and expanded growth potential for the combined business,” Raina said.