Skift Take

Some recent efforts by businesses to go public via mergers with blank check companies have stalled or fizzled. But it's a vote of confidence in Mondee that Travelport's financial sponsors, Elliott Management and Siris Capital, are reportedly putting up money to support the travel tech company in going public.

Mondee, a travel technology firm based in San Mateo, California, said on Monday that the blank check company that aims to buy it has secured critical money for the merger with plans to go public. Elliott Management and Siris Capital — the institutional investors who happen to be owners of another travel technology firm, Travelport — are reportedly among the investors.

Ithax Acquisition Corp., a special purpose acquisition company, has raised an additional $20 million for its private investment in public equity, or PIPE. Ithax’s planned $967 million merger with Mondee is now almost certain. The deal would lead to Mondee trading on the Nasdaq stock market.

The two new investors who committed to subscribe for $20 million to the all-equity PIPE are an arm of Elliott Management, the activist investor, and Siris Capital, the Financial Times said, citing “people briefed on the deal.”

Mondee declined to comment. Elliott and Siris couldn’t be reached by publication time.

Ithax now has investor commitments worth $70 million for its all-equity PIPE, including from Morgan Stanley Investment Management and private equity firm Arc Pe, the company said.

“This is a major win for Mondee as it highlights the attractive valuation of the company, as well as the strength of Mondee’s business model during this very solid travel recovery,” Mondee Founder and CEO Prasad Gundumogula told Skift.

Mondee provides technology services for multiple travel business models. Its flagship business model is helping leisure travel agencies sell airfares via wholesale discounts. But it has diversified into other concepts, including a subscription-based consumer travel agency and a corporate travel booking service.

Travelport is one of the suppliers of content to Mondee’s platforms.

The company said its profitability set it apart from startups that have recently struggled after going public through special-purpose acquisition companies, or SPACs. Dozens of startups have been punished with falling share prices after having failed to meet performance projections.

In the pre-pandemic year of 2019, the company generated $46 million in adjusted earnings before interest, taxes, depreciation, and amortization on $177 million in adjusted net revenue. In 2020, it suffered a $12 million loss.

In 2021 Mondee bounced back. It generated $1.2 million in adjusted earnings on net revenue of more than $90 million. See its pitch deck and more details in Skift’s article on the Mondee last month.

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Tags: elliott management, investments, IPOs, mondee, private equity, siris capital, spacs, technology, travel agents, travel tech, travel technology, travelport

Photo credit: Grand Canyon National Park's Bright Angel Trail. Source: U.S. National Park Service. NPS / Flickr / Creative Commons

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