Yatra Online, which owns and operates travel portal Yatra.com, has agreed to be acquired by Nasdaq-listed special purpose acquisition firm Terrapin 3 Acquisition Corp (TRTL) in a reverse merger deal, which has an enterprise value of $218 million.
TRTL, a blank cheque company, which made its public market debut in 2014, was founded by Nathan Leight, and is cosponsored by affiliates of Terrapin Partners and affiliates of Macquarie Group. Yatra will also list on Nasdaq, and the merged entity will be led by Dhruv Shringi and the Yatra management team. The transaction is expected to be completed by October this year.
According to filings submitted to the US SEC, the market cap of the newly-merged entity will be between $350-$402 million. Yatra’s net revenue for the fiscal ending March 2016 was Rs 415 crore, up from Rs 346 crore in the year-ago period. It is projecting a revenue of Rs 1,363 crore by fiscal 2020.
In a statement released by both companies, under the terms of the transaction, the current shareholders of Yatra, which include a number of venture capital and strategic investors, will continue to own at least 35% of the issued and outstanding shares, post the acquisition.
“Given the volatility in the markets, and also after Brexit, we couldn’t be sure of a direct listing. This procedure gives us more certainty and is a lot quicker to implement. Also, getting a PE investor wouldn’t give existing shareholders the kind of liquidity that this does,” Shringi, CEO of Yatra, told.
Yatra counts Reliance Venture Asset Management, the TV18 Group, Norwest Venture Partners, Intel Capital, IDG Ventures India and Vertex Venture Holdings among its investors.
As per the official statement, the multi-phased deal will see the first $100 million of cash allocated entirely to the combined entity’s balance sheet, as well as towards payment of transaction expenses.
Any amount greater than $100 million available from TRTL will then be allocated in an 80:20 ratio between current Yatra shareholders and the combined entity’s balance sheet. Cash payments to current Yatra shareholders will be capped at $80 million.
“We are delighted to have TRTL on board in combination with Yatra. This transaction will provide Yatra with significant resources to further strengthen its presence as one of the leading players in the fast growing Indian online travel market,” said Promod Haque, senior managing partner at Norwest Venture Partners.
MIHI LLC, an affiliate of Macquarie Capital, has committed to buy an additional $20 million of TRTL equity as part of the transaction. TRTL, in its IPO in 2014, had raised $212.75 million, which is held in a trust account, for the purpose of acquiring or merging with a publiclylisted, or a privately-held company. Founded in 2006, Yatra competes with the likes of Nasdaq-listed MakeMyTrip. com, Naspers-backed Ibibo Group, Cleartrip.com and online hotel aggregator OYO.
It said customers had booked more than 2.8 million air travel reservations and hotel stays with total transaction value worth more than $900 million for the fiscal ending March 2016, up by a fourth from the previous financial year. Shringi told that the funds raised from this transaction will be used in the company’s expansion, especially in the tier-II and tier-III cities in India, given the government’s push towards regional aviation and the growth in air travel demand.
Source: The Economic Times
