Yatra and Ebix recently witnessed a deterioration of relations as the companies terminated their merger and have engaged in legal proceedings.
Crux of the Matter
Merger Times In 2019, Ebix and Yatra engaged in a deal with the former buying the latter for $337.8 million or ₹2,323 crore. Ebix is a software-on-demand based firm in US, while Yatra is an Indian online travel agency handling the booking of over 1 lakh hotels in India.
What Went Wrong? On 6 June 2020, an announcement regarding the termination of the deal was made. Their Merger Agreement had a clause of Outside Date (OD). It is the last date to carry out the merger. After OD, both parties have the right to walk away and no penalties are charged. In the case of Yatra-Ebix, OD was 4th June 2020. The matters turned worse with legal involvement as Yatra opted for litigation against Ebix accusing the latter of “breach of terms” and sought “substantial damages”.
The complaint seeks to hold Ebix accountable for breaches of its representations, warranties and covenants in the Merger Agreement and an ancillary extension agreement and seeks substantial damages. As detailed in the complaint, Ebix’s conduct breached material terms of the agreements and frustrated Yatra’s ability to close the transaction and obtain the benefit of Yatra’s bargain for Yatra’s stockholders Official Statement From Yatra
Counterpunch After denying the accusations of Yatra regarding merger and breach of terms in its official statement, Ebix is planning to engage in the legal process by filing a counter-suit against it.
Ebix worked diligently to fulfill its obligations under the Merger Agreement and thus strongly disagrees with the allegations set forth in the complaint. Ebix intends to enforce all of its rights under the Merger Agreement, and is currently considering all options, including a countersuit against Yatra, on account of multiple breaches of the Merger Agreement Official Statement From Ebix
Curiopedia
Early investors of Yatra include Reliance Venture Asset Management Ltd, Web18 of TV18 Group, Norwest Venture Partners and Intel Capital invested in Yatra.com. In April 2011, the website announced funding of $28 million from investors including Valiant Capital Management, Norwest Venture Partners (NVP) under Promod Haque’s management, and Intel Capital.
In January 2020, food delivery app Zomato acquired the Indian operations of Uber Eats for around $350 million, which is the food delivery biz run by Uber. The transaction marks the first big consolidation move in the cash-intensive online food-delivery market, led by Swiggy and Zomato.
Ixigo (pronounced “ik-si-go”) is an intelligent, AI-based travel app, with over 170 million users. The app uses Artificial Intelligence for deal discovery, personalized recommendations, airfare predictions, train running information, etc. ixigo was found in 2007 and has its headquarters in Gurugram, Haryana. In March 2017, ixigo closed a funding of $15 million in Series B round by Venture Capital firm Sequoia Capital India and Fosun RZ Capital.
Curated Coverage
Moneycontrol – Ebix plans countersuit against Yatra as merger fight intensifies
Business Today – Ebix buys Yatra for Rs 2,323.6 crore; to create India’s largest travel company
Businessworld – Indian Travel Firm Yatra Scraps Merger Deal With US-Based Ebix
Livemint – Yatra Online terminates merger pact with US-based Ebix Inc
Comments