India’s VC-backed Yatra Online agrees backdoor US listing
VC-backed Yatra Online, an Indian travel services provider, has agreed to be acquired by a special purpose US buyout firm as part of a backdoor NASDAQ listing scheme that values the company at $218 million.
Under the arrangement, NASDAQ-listed Terrapin 3 Acquisition Corporation will acquire Yatra and relist under the Yatra brand to accelerate the newly public company's growth through increased access to capital and financial flexibility. An affiliate of Macquarie Capital will contribute $20 million to an initial $100 million cash payment by Terrapin. Payments in excess of this amount will be allocated 80% to current Yatra shareholders and 20% as cash to the combined company's balance sheet. Cash payments to Yatra owners will be capped at $80 million.
According to a statement, Yatra will retain its current management and its existing shareholders will continue to own at least 35% of the issued and outstanding shares in the combined company. Yatra's VC backers include Reliance Venture Asset Management, Norwest Venture Partners, Intel Capital, IDG Ventures and Temasek Holdings-owned Vertex Ventures - each of which participated in a $23 million round for the company in 2014. Other investors have included Indian media company TV 18 Group and Valiant Capital, which led a $45 million financing round in 2011.
"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," Promod Hague, senior managing partner at Norwest, said. "We believe that the online travel market in India has a long runway of future growth with the key drivers of increasing prosperity, smartphone penetration and internet access across broad sections of the population. With its strong brand awareness and robust technology platform, Yatra is perfectly positioned to leverage the additional resources from this transaction to grow the business at an even faster pace going forward."
Launched in August 2006, Yatra offers online travel services aimed at both leisure and business travelers in India. It claims to provide mobile-enabled reservation connectivity in multiple languages for more than 60,000 hotels in the country, which represents a larger network than any other Indian online travel agent. Yatra customers booked more than 2.8 million air travel reservations and hotel stays with total transaction value worth more than $900 million during the 2016 financial year, reflecting a year-on-year increase of 25%.
Based in New York, Terrapin was created with the express purpose of generating long-term returns by partnering a company with growth ambitions that would benefit from a public listing and access to the buyout firm's cash resources. Its IPO in 2014 raised $212.7 million for this strategy.
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