MakeMyTrip acquires majority stake in Thai hotel aggregator for $3.2M
NASDAQ-listed online travel services firm MakeMyTrip Ltd has struck its second acquisition within a month by snapping an effective majority equity interest in Thai hotel aggregator comprising a group of companies known as the ITC Group for $3.2 million. The ITC Group comprises of International Tour Center Co Ltd, ITC Bangkok Co Ltd and ITC South Co Ltd.
Pursuant to the transaction documents signed with the ITC Group and its existing shareholders, MakeMyTrip paid $2.2 million to the existing shareholders for the sale of their shares in the ITC Group and paid $1 million for subscription of new shares in the ITC Group.
MakeMyTrip will also acquire the remaining shares of the ITC Group from the existing shareholders in cash, payable in four tranches, over an earn-out period ending December 2016, at such price based on valuation linked to the future profitability of the ITC Group.
ITC Group is a hotel aggregator and tour operator for Thailand. The ITC Group has relationships with a number of hotels and other local vendors in Thailand to provide hotel reservations, excursion tours and other travel related services for inbound and outbound travellers in Thailand and the South East Asia region. The acquisition will help MakeMyTrip further expand its presence in Thailand, a key market for its outbound holidays business, by establishing more direct hotel relationships in the country.
Thailand is an important outbound travel destination from India and has accounted for approximately one million Indian visitors this year. Airlines in India, including low cost carriers, are aligning their fleet for direct flights from various cities in India to Thailand.
This is the second deal for MakeMyTrip this month. It also 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 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.
Last month, in an exclusive chat with Techcircle.in, Deep Kalra, chairman and CEO of MakeMyTrip, had talked about three focus areas as far as acquisitions are concerned. Read here for more on that.
(Edited by Prem Udayabhanu)