Atlanta-based software company Ebix has reached an agreement to acquire Indian online travel booking company Yatra Online through a merger with an estimated enterprise value of $337.8 million.
Under the terms of the deal, each ordinary share of Yatra would be worth 0.005 shares of a new class of preferred stock of Ebix. The companies said the deal represents a 32% premium to Yatra’s closing share price on March 8, 2019, the last trading day prior to Ebix’s publicly disclosed buyout proposal.
Under the deal, Yatra would become part of Ebix’s EbixCash travel portfolio but would continue to servce customers under the Yatra brand. EbixCash posted a profit of $8.5 million in the fourth quarter of 2018 on operating income of $41.5 million, and invested more than $650 million in businesses in India.
The merger could position Yatra to better compete with MakeMyTrip, which raised $330 million from Naspers and Ctrip in 2017.
Ebix is planning an initial public offering for EbixCash in the second quarter of 2020.
“Over the last few months, we have evolved a detailed synergistic plan, that once fully executed can provide between 40 to 75 cents of accretion to the Ebix non-GAAP EPS,” Ebix chairman, president and chief executive officer Robin Raina said in a statement. “We are excited by the cross-selling opportunities that this combination provides us, while further strengthening our future EbixCash IPO offering.”
Yatra has said the Indian travel segment is set to grow to $85 billion by 2022, with 45% of all transactions taking place on online platforms.
Citi is acting as exclusive financial adviser to Yatra. Bass, Berry & Sims is acting as legal adviser for Ebix.
The transaction has been approved by the boards of both companies. It is expected to close by the fourth quarter of 2019.
Shares of Yatra Online were up more than 12% on Wednesday on the news.