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Robin Raina-promoted Ebix Inc, the US multinational that provides on-demand software and e-commerce services to a host of industries, has announced its interest in buying out the Nasdaq-listed domestic travel portal Yatra Online Inc for USD 7 per share -- an 84 percent premium -- on a debt-free basis.
If the deal goes through this will be second deal for Ebix in seven months, having bought Centrum group's forex and travel business Centrum Direct for a reported Rs 1,2000 crore valuation last August.
Centrum Direct was the largest travel business and forex dealer in the country before the deal.
Ebix serves insurance, financial, healthcare and e-learning sectors spanning 50 markets across five continents.
The merged entity will become the largest and most profitable end-to-end travel industry player in the domestic insurance services industry, providing distribution, travel insurance, forex, MICE, visa services, travel tech services.
Yatra Online Inc is the parent of the Gurugram-based Yatra Online, which is the country's largest corporate travel services provider with over 800 corporate customers through the portal Yatra.com.
Commenting on the acquisition plan, Ebix chairman, president and chief executive Robin Raina, said, "We believe that Yatra Online's products and services are complementary to EbixCash's travel portfolio of Via and Mercury.”
He said a merger can bring in significant synergies and create the largest and most profitable travel services company in the country through economies of scale and expanded growth potential for the combined business.
"Our interest in making an offer for Yatra Online is also borne out of our firm belief that a combination of the two companies can be substantially and immediately accretive to Ebix earnings and margins," Raina added.
Ebix said if the deal goes through it will merge Yatra Online with EbixCash subsidiary, which is the new name of Centrum Direct and that the offer is subject to due diligence and customary regulatory and other closing conditions.
Ebix seeks to buy around 48 million Yatra Online diluted shares outstanding, representing an 84 percent premium to Yatra Online's closing price of USD 3.80 as of March 8, it said in a statement.
Ebix, which employs over 9,000 in the country alone, is present across 50 countries spanning five continents.
Launched August in 2006, Yatra serves over 800 domestic corporates, providing them with information on pricing, availability, and booking facility for domestic and international air and hotel bookings, holiday packages, bus and train tickets, and city cabs, homestays and cruises.
It offers real-time bookings for over 1,00,000 domestic hotels and over 1 million hotels around the world.
The offer values Yatra's all receivables, cash and restricted cash worth at least USD 25 million, with all liabilities being paid for by Yatra.
It said the deal can be either all cash or all stock and post closing, Ebix's stock will be converted at a minimum value of USD 59.
Ebix also said the deal will be void if the Yatra board does not respond by March 18.
Ebix believes that Yatra Online can generate revenue upwards of USD 150 million annually with over 30 percent operating margin, within 6 months of the acquisition by Ebix and that a merged entity can generate 25-30 cents in value accretion for the shareholders.
Ebix was ranked as one of the 100 fastest growing companies by Fortune in the last decade as its stock has returned over 16,000 percent since going public.