MakeMyTrip acquires international hotel booking site HotelTravel.com
HotelTravel.com is an international online travel information and hotel reservations service offering discounted hotel rates in more than 100 countries worldwide. With a multicultural staff of more than 300, HotelTravel boasts of providing Customer Service in 10 different languages. The HT Group has its presence in Thailand, Singapore and Malaysia in the South-east Asian region, and has tie-ups with around 80,000 hotels across the globe. While the reservation & call centre facility is located in Thailand, the group also has offices in Malaysia, Hong Kong and the UK. MMT disclosed the acquisition in a release, along with its financial results for the second quarter ended September 30, 2012.
MakeMyTrip Limited (Nasdaq:MMYT), India’s leading online travel company has acquired the Hotel Travel Group for $25 million. The HT Group, under the brand ‘Hotel Travel’, has been operating the website www.hoteltravel.com for more than a decade in South-east Asia, although its booking platform offers hotel reservation across the world.
The total consideration payable to the promoters of the HT Group by MMT is $25 million, of which $15 million was paid in cash in the first closing on Nov 6. The balance $10 million will be paid in the form of MMT shares in three annual tranches and will be completed by March 2016. BMR Advisors acted as the exclusive transaction advisor to MMT for this deal.
Two of the promoters of the Hotel Travel Group will continue in their current roles at the South-east Asian travel services firm and will be eligible for additional earnouts and incentives for the next 3-4 years, based on the HT Group meeting certain revenues and earnings before interest, taxes, depreciation and amortisation targets. The additional earnouts can range up to $35 million and are payable partly in cash and partly in the form of MMT shares.
The company’s share price crashed on Tuesday after it slipped back into losses with slowdown in the air ticketing business and lowered revenue guidance for FY13. The shares last traded at $12.58 a unit, down over 17 per cent and below the IPO issue price of $14.
Last month, in an exclusive chat with Techcircle.in, Deep Kalra, chairman and CEO of MakeMyTrip, has talked about three focus areas as far as acquisitions are concerned. Read here for more on that.
Last year, MMT struck another deal in the region by acquiring a majority stake in Luxury Tours & Travel and later hiked its stake to near 100 per cent.
The company had also been active in terms of inorganic expansion within India. Late last year, MMT entered into a shareholders’ agreement and share subscription & purchase agreement with My Guest House Accommodations Pvt Ltd (MGH) and its existing shareholders would acquire 100 per cent of MGH’s ordinary shares through an earn-out structure based on the achievement of various business parameters spread over eight years.
Prior to that deal, Make My Trip teamed up with its largest shareholder, private equity firm SAIF Partners, to acquire a majority stake in Gurgaon-based Le Travenues Technology Pvt Ltd, which owns and operates the travel search engine iXiGO.