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MakeMyTrip boards ibibo, to lead market

Buyer's shares soar 54% to $31.4 on Nasdaq

Ajay Modi & Aneesh Phadnis  |  New Delhi/Mumbai 

makeMYtrip
Source: www.makemytrip

Leading domestic online travel portal MakeMyTrip, a Nasdaq-listed firm, on Tuesday announced the acquisition of rival ibibo, in one of the largest consolidations in the space.

The deal size is estimated over $500 million (about Rs 3,400 crore). It was an all-stock deal.


The two together will capture close to half of the domestic online hotel bookings and will dominate the online air ticketing space.

The deal, expected to be completed by December, will need to get the go-ahead of the (CCI), the fair trade watchdog.

While is the country’s biggest online air ticketing and hotel booking company, is a close second in the online hotel booking space. It’s market share in online air ticket segment is not known.

When taken together, in the financial year 2015-16, and did 34 million transactions, of which 50 per cent came from redBus, the country’s biggest online bus booking platform, which had acquired in 2013.

The combined entity of and will now compete against Yatra, Cleartrip and Expedia. The different platforms in the combined entity — MakeMytrip, Rightstay, ibibo, and — will be retained.

MakeMyTrip boards ibibo, to lead market
The gain for will be it now gets to expand its air and hotel booking and also enter bus booking through and taxi-booking through Ryde, which is also a part of ibibo.

Analysts said after this deal, and jointly will be in a better position to bargain for margins with airlines and hotels.

Following the transaction, will own 100 per cent of the group. However, Naspers, which is ibibo’s majority shareholder, will own 40 per cent stake in MakeMyTrip, becoming its single largest shareholder.

Accordingly, will contribute proportionate working capital upon the closing of the transaction.

Financials of the deal were not announced.

CLOSING IN
The online booking segment has seen a number of deals this year
January: Ctrip.com, China’s largest travel site, purchased stake in MakeMyTrip
Deal size: $180 million

February: South African internet and media company invested in ibibo.
Deal size: $250 million

July: Yatra announced a merger with Nasdaq-listed American company Terrapin 3 Acquisition Corporation (TRTL).
Deal size: $218 million

October: acquires to form India’s biggest online travel company*
*Deal size not revealed

MakeMyTrip’s market capitalisation hit a high of $1.3 billion on Nasdaq, putting the value of Nasper’s holding at approximately $520 million. Ctrip, which invested $180 million in in January, will have a 10 per cent share.

Jointly owned by Johannesburg Stock Exchange-listed internet firm (91 per cent) and Chinese investment company Tencent (nine per cent), got $250 million from the former early this year.

and Tencent are selling their entire stake in to MakeMyTrip.  

The domestic online travel space has seen a series of action this calendar year. In January, raised $180 million from Chinese travel major Ctrip to grow the hotel business.

The transaction is expected to unlock value for stakeholders by combining the complementary strengths of each business.

brings its strong brand, robust mix of domestic and outbound hotels and packages business and strong position in the air ticketing business, according to analysts. The group, via its brand goibibo and redBus, comes with a strong presence in various fast growing travel segments including hotels, bus bookings and air ticketing, said.

Deep Kalra, group CEO and executive chairman, MakeMyTrip, said in an investors’ call that there is a huge growth opportunity in most verticals except air ticketing where already almost 50 per cent of the bookings happen online. “The penetration level in online branded hotel booking is just 15 per cent. There is an inherent strength in all the brands and there are core loyal users. We will play to the advantage of each of these”.

Following the closing of the proposed transaction, founder Deep Kalra will remain group CEO and executive chairman of and co-founder Rajesh Magow will continue to remain CEO India of MakeMyTrip. Founder and CEO of the group, Ashish Kashyap, will join MakeMyTrip’s executive team as a co-founder and president of the organisation.

Morgan Stanley is the exclusive financial advisor to and has also provided a fairness opinion to the board of MakeMyTrip. Latham and Watkins, S&R Associates and Appleby are legal advisors to MakeMyTrip. Goldman Sachs is the exclusive financial advisor to and Naspers, while Cravath, Swaine & Moore, and are its legal advisors for the deal.

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MakeMyTrip boards ibibo, to lead market

Buyer's shares soar 54% to $31.4 on Nasdaq

Buyer's shares soar 54% to $31.4 on Nasdaq
Leading domestic online travel portal MakeMyTrip, a Nasdaq-listed firm, on Tuesday announced the acquisition of rival ibibo, in one of the largest consolidations in the space.

The deal size is estimated over $500 million (about Rs 3,400 crore). It was an all-stock deal.

The two together will capture close to half of the domestic online hotel bookings and will dominate the online air ticketing space.

The deal, expected to be completed by December, will need to get the go-ahead of the (CCI), the fair trade watchdog.

While is the country’s biggest online air ticketing and hotel booking company, is a close second in the online hotel booking space. It’s market share in online air ticket segment is not known.

When taken together, in the financial year 2015-16, and did 34 million transactions, of which 50 per cent came from redBus, the country’s biggest online bus booking platform, which had acquired in 2013.

The combined entity of and will now compete against Yatra, Cleartrip and Expedia. The different platforms in the combined entity — MakeMytrip, Rightstay, ibibo, and — will be retained.

MakeMyTrip boards ibibo, to lead market
The gain for will be it now gets to expand its air and hotel booking and also enter bus booking through and taxi-booking through Ryde, which is also a part of ibibo.

Analysts said after this deal, and jointly will be in a better position to bargain for margins with airlines and hotels.

Following the transaction, will own 100 per cent of the group. However, Naspers, which is ibibo’s majority shareholder, will own 40 per cent stake in MakeMyTrip, becoming its single largest shareholder.

Accordingly, will contribute proportionate working capital upon the closing of the transaction.

Financials of the deal were not announced.

CLOSING IN
The online booking segment has seen a number of deals this year
January: Ctrip.com, China’s largest travel site, purchased stake in MakeMyTrip
Deal size: $180 million

February: South African internet and media company invested in ibibo.
Deal size: $250 million

July: Yatra announced a merger with Nasdaq-listed American company Terrapin 3 Acquisition Corporation (TRTL).
Deal size: $218 million

October: acquires to form India’s biggest online travel company*
*Deal size not revealed

MakeMyTrip’s market capitalisation hit a high of $1.3 billion on Nasdaq, putting the value of Nasper’s holding at approximately $520 million. Ctrip, which invested $180 million in in January, will have a 10 per cent share.

Jointly owned by Johannesburg Stock Exchange-listed internet firm (91 per cent) and Chinese investment company Tencent (nine per cent), got $250 million from the former early this year.

and Tencent are selling their entire stake in to MakeMyTrip.  

The domestic online travel space has seen a series of action this calendar year. In January, raised $180 million from Chinese travel major Ctrip to grow the hotel business.

The transaction is expected to unlock value for stakeholders by combining the complementary strengths of each business.

brings its strong brand, robust mix of domestic and outbound hotels and packages business and strong position in the air ticketing business, according to analysts. The group, via its brand goibibo and redBus, comes with a strong presence in various fast growing travel segments including hotels, bus bookings and air ticketing, said.

Deep Kalra, group CEO and executive chairman, MakeMyTrip, said in an investors’ call that there is a huge growth opportunity in most verticals except air ticketing where already almost 50 per cent of the bookings happen online. “The penetration level in online branded hotel booking is just 15 per cent. There is an inherent strength in all the brands and there are core loyal users. We will play to the advantage of each of these”.

Following the closing of the proposed transaction, founder Deep Kalra will remain group CEO and executive chairman of and co-founder Rajesh Magow will continue to remain CEO India of MakeMyTrip. Founder and CEO of the group, Ashish Kashyap, will join MakeMyTrip’s executive team as a co-founder and president of the organisation.

Morgan Stanley is the exclusive financial advisor to and has also provided a fairness opinion to the board of MakeMyTrip. Latham and Watkins, S&R Associates and Appleby are legal advisors to MakeMyTrip. Goldman Sachs is the exclusive financial advisor to and Naspers, while Cravath, Swaine & Moore, and are its legal advisors for the deal.
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Business Standard
177 22

MakeMyTrip boards ibibo, to lead market

Buyer's shares soar 54% to $31.4 on Nasdaq

Leading domestic online travel portal MakeMyTrip, a Nasdaq-listed firm, on Tuesday announced the acquisition of rival ibibo, in one of the largest consolidations in the space.

The deal size is estimated over $500 million (about Rs 3,400 crore). It was an all-stock deal.

The two together will capture close to half of the domestic online hotel bookings and will dominate the online air ticketing space.

The deal, expected to be completed by December, will need to get the go-ahead of the (CCI), the fair trade watchdog.

While is the country’s biggest online air ticketing and hotel booking company, is a close second in the online hotel booking space. It’s market share in online air ticket segment is not known.

When taken together, in the financial year 2015-16, and did 34 million transactions, of which 50 per cent came from redBus, the country’s biggest online bus booking platform, which had acquired in 2013.

The combined entity of and will now compete against Yatra, Cleartrip and Expedia. The different platforms in the combined entity — MakeMytrip, Rightstay, ibibo, and — will be retained.

MakeMyTrip boards ibibo, to lead market
The gain for will be it now gets to expand its air and hotel booking and also enter bus booking through and taxi-booking through Ryde, which is also a part of ibibo.

Analysts said after this deal, and jointly will be in a better position to bargain for margins with airlines and hotels.

Following the transaction, will own 100 per cent of the group. However, Naspers, which is ibibo’s majority shareholder, will own 40 per cent stake in MakeMyTrip, becoming its single largest shareholder.

Accordingly, will contribute proportionate working capital upon the closing of the transaction.

Financials of the deal were not announced.

CLOSING IN
The online booking segment has seen a number of deals this year
January: Ctrip.com, China’s largest travel site, purchased stake in MakeMyTrip
Deal size: $180 million

February: South African internet and media company invested in ibibo.
Deal size: $250 million

July: Yatra announced a merger with Nasdaq-listed American company Terrapin 3 Acquisition Corporation (TRTL).
Deal size: $218 million

October: acquires to form India’s biggest online travel company*
*Deal size not revealed

MakeMyTrip’s market capitalisation hit a high of $1.3 billion on Nasdaq, putting the value of Nasper’s holding at approximately $520 million. Ctrip, which invested $180 million in in January, will have a 10 per cent share.

Jointly owned by Johannesburg Stock Exchange-listed internet firm (91 per cent) and Chinese investment company Tencent (nine per cent), got $250 million from the former early this year.

and Tencent are selling their entire stake in to MakeMyTrip.  

The domestic online travel space has seen a series of action this calendar year. In January, raised $180 million from Chinese travel major Ctrip to grow the hotel business.

The transaction is expected to unlock value for stakeholders by combining the complementary strengths of each business.

brings its strong brand, robust mix of domestic and outbound hotels and packages business and strong position in the air ticketing business, according to analysts. The group, via its brand goibibo and redBus, comes with a strong presence in various fast growing travel segments including hotels, bus bookings and air ticketing, said.

Deep Kalra, group CEO and executive chairman, MakeMyTrip, said in an investors’ call that there is a huge growth opportunity in most verticals except air ticketing where already almost 50 per cent of the bookings happen online. “The penetration level in online branded hotel booking is just 15 per cent. There is an inherent strength in all the brands and there are core loyal users. We will play to the advantage of each of these”.

Following the closing of the proposed transaction, founder Deep Kalra will remain group CEO and executive chairman of and co-founder Rajesh Magow will continue to remain CEO India of MakeMyTrip. Founder and CEO of the group, Ashish Kashyap, will join MakeMyTrip’s executive team as a co-founder and president of the organisation.

Morgan Stanley is the exclusive financial advisor to and has also provided a fairness opinion to the board of MakeMyTrip. Latham and Watkins, S&R Associates and Appleby are legal advisors to MakeMyTrip. Goldman Sachs is the exclusive financial advisor to and Naspers, while Cravath, Swaine & Moore, and are its legal advisors for the deal.

image
Business Standard
177 22

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