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MakeMyTrip acquires international hotel booking site HotelTravel.com for $25M

NASDAQ-listed online travel services firm MakeMyTrip India Pvt Ltd has acquired the Hotel Travel Group (HT 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 acquisition will help MakeMyTrip to further strengthen its presence in the hotel and holidays segment internationally, especially in the South-east Asia, a market that comprises a good chunk of outbound travel from India.

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 MakeMyTrip for this deal.

Two of the promoters of the HT 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 EBIDTA (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 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.

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 (more on that here). 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, MMT 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.

In another deal in the same space, Yatra acquired the online hotels aggregator Travelguru.com from Travelocity for an undisclosed amount in June this year. It was Yatra's third acquisition within a year. Last August, Yatra had snapped up Bangalore-based Magic Rooms Solutions India Pvt Ltd, a hotels aggregation site backed by Nexus Venture Partners. In October 2010, the OTA also acquired Delhi-based Travel Services International for an undisclosed sum and entered the ticket consolidation space.

(Edited by Sanghamitra Mandal)

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