Nasdaq-listed Ebix Inc, through one of its Indian subsidiaries EbixCash, has acquired two travel companies – Mumbai-based Mercury Travels and Delhi-based Leisure Corp – for a cumulative amount of $14.2 million (about ₹100 crore), with the goal of creating a new Travel Division to focus on a niche segment of the travel market.
The new Travel Exchange named Mercury – An EbixCash Luxury initiative, will focus on the luxury, events and sports related traveler and will be led by the Leisure Corp Founder Naveen Kundu. The Mercury Exchange will have the following three tightly integrated components – Mercury Travel’s entire corporate, leisure & adventure related travel business with the exception of its Forex business, Leisure Corp’s entire sports and events related travel business (MICE) and Via.com’s events based travel business (MICE)
Naveen Kundu will hold 15% shareholding in this new Mercury initiative, while Ebix will have a controlling 85% share in the venture. Mercury’s Forex business will be integrated into EbixCash’s existing CDL Forex exchange business.
The acquisition of Mercury and Leisure Corp will increase the employee strength of Ebix in India by around 400 employees to approximately 7,600 employees. With the creation of this new luxury Mercury Division, Ebix will now have two brands in travel focused on different niche audiences – Via and Mercury.
Ebix believes that the Mercury business initiative can continue to grow at the rate of 20 per cent or more annually with operating margins of 30% or more, once fully integrated. Ebix expects the acquisition to be immediately accretive to its earnings and forecasts 9 cents in increased Diluted EPS, once the acquisitions are fully integrated over the next 6 months. Ebix funded the acquisition using its internal cash reserves and did not use any investment bankers for the transaction.
Ebix intends to consolidate these two acquisitions into its Financial Exchange – EbixCash while bringing significant synergies and redundancies to the combined operation. The acquisition of the Omni-channel Business, would further strengthen Ebix’s position in the Financial Exchange market in India, as travel transactions can be one of the key areas of any leading financial exchange, with an estimated user base of 600 million in India alone.
“I am excited to join the Ebix family and lead EbixCash’s new Mercury initiative. With affluence and an upper middle class continuing to grow in India, it is time to have a travel exchange that can provide high standards of service and luxury like never before to this section of the society.” Naveen Kundu, Founder and Managing Director of Leisure Corp said. “I have spent my career conceptualizing and implementing creative event based travel programs for the corporates, sports enthusiasts and the adventure travelers. We will now try to blend that expertise and niche focus, with our focus on luxury and creating new white labeled travel properties.”
Ebix Chairman, President and CEO Robin Raina said “Mercury has built a reputation for itself in the affluent luxury market place with its levels of service, built around the high standards associated with an effort backed by the Oberoi Hotels chain. Leisure Corp is a leader in the events based travel business space with a clear focus on the financial and insurance industries. We are excited to be able to bring these two leading companies together, with the goal of creating a pioneering luxury travel initiative. Between this Mercury initiative and our existing Via.com travel initiative, EbixCash is now uniquely positioned as an Financial Exchange that has end-to-end travel solutions for all sections of the society.”
