Ebix to Acquire India's Corporate Travel Player Yatra for $338 Million

Ebix, an Atlanta-based tech company, is buying Indian-based travel services provider Yatra Online for $337.8 million. The deal is the largest consolidation in India's online travel market since MakeMyTrip acquired rival GoIbibo in 2016.

Ebix's core business is selling software to insurers. But since late 2017 it has acquired several travel businesses in India, such as Via.com, Mercury, Leisure Corp, Pearl International Tours & Travel, and Lawson Travel & Tours. These businesses have enabled cross-selling with its money transfer and foreign exchange units.

Yatra began as a consumer-facing competitor to online travel agencies like MakeMyTrip. Since 2017 it has pivoted to corporate travel.

Earlier this year Yatra claimed it was the largest independent provider of self-booking tools to India-based corporations for booking flights, hotels, and insurance as measured by gross booking volume. Yatra, whose name is Hindi for "journey," counts as clients e-commerce giant Flipkart, wireless operator Airtel, and Tata Consulting Services.

Ebix has focused on corporate travel. That focus has helped it avoid the costly subsidizing of hotel rates and marketing wars to acquire leisure travelers that kept India's largest homegrown online travel company, MakeMyTrip, unprofitable.

Ebix aspires to combine Gurgaon-based Yatra with its other travel and payments units. Ebix then wants to list the group as a public company under the EbixCash name next year. EbixCash is the flagship unit that is a Southeast Asian travel money exchange, already serving more than 8,000 corporate clients. EbixCash could sell hard and digital currency and pre-paid multi-currency cards to Yatra's corporate clients, too. An EbixCash group could offer software services for distribution, travel insurance, meetings and events planning, and visa applications.

In August 2018, Ebix bought a controlling share in two companies — Mercury Travels and Leisure Corp. — for a combined sum of $14.2 million. Leisure Corp.'s flagship service was corporate meetings and conferences, and Mercury Travel had a mix of corporate and adventure travel sales. Combined under the Mercury label, the unit helps to manage massive corporate events market in India on behalf of hundreds of employees. Other units include Via.com, an event-based travel business that focuses on Southeast Asian markets, and Zillious, a corporate travel software company.

Ebix's takeover bid for Yatra of $337.8 million represented a greater than 80 percent premium on Yatra's market valuation as of the day of original bid. In 2016, Yatra went public through a reverse merger with the U.S. special purpose acquisition company Terrapin 3, raising $92.5 million.

For its part, most of Ebix's investments in India are in the form of loans granted to its Indian subsidiaries. The goal of an initial public offering for EbixCash would be to recoup that cash to repay its loans. For more context, see Skift's deep dive "What India Reveals About the Future of Online Travel."