Business Context and Reporting Period
This Form 6-K filing by Yatra Online, Inc. (Yatra) is dated July 16, 2019. The report discloses the entry into a Material Definitive Agreement, specifically a Merger Agreement with Ebix, Inc. (Ebix) and its wholly-owned subsidiary, EbixCash Travels Inc. (Merger Sub). Under the agreement, Merger Sub will merge with and into Yatra, with Yatra surviving as a direct, wholly-owned subsidiary of Ebix. The transaction is intended to qualify as a tax-free reorganization.
Key Financial Metrics
The filing text does not provide specific financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity for the reporting period. The document focuses exclusively on the terms of the proposed merger.
Material Changes and Transaction Terms
The primary material change is the proposed acquisition of Yatra by Ebix. Key terms include:
- Exchange Ratio: Outstanding Yatra Ordinary Shares, Class A Shares, and Yatra USA Class F Shares will be converted into the right to receive 0.005 shares of Ebix Series Y Convertible Preferred Stock (Ebix Preferred Stock) per share.
- Class F Shares: Each Class F Share will convert into the right to receive 0.00000005 shares of Ebix Preferred Stock.
- Options and RSUs: All options and restricted stock units will be cancelled and converted into the right to receive merger consideration equivalent to one Ordinary Share.
- Warrants: Existing Yatra warrants will be assumed by Ebix and converted into options to purchase Ebix Preferred Stock, with adjusted share counts and exercise prices based on the Exchange Ratio.
- Conversion: Each share of Ebix Preferred Stock is convertible at the holder's option into 20 shares of Ebix common stock.
Guidance, Outlook, Risks, and Contingencies
Conditions to Closing: The merger is subject to customary closing conditions, including:
- Approval by at least two-thirds of Yatra shareholders entitled to vote.
- Effectiveness of the Form S-4 registration statement filed by Ebix.
- Reduction of Yatra Warrants such that no more than 8,768,979 Ordinary Shares remain subject to them.
- Payment of financial advisor fees in full.
- Absence of laws or injunctions prohibiting the merger.
Termination Provisions:
- Outside Date: The agreement may be terminated if the merger is not consummated by April 16, 2020.
- Termination Fee: Yatra must pay a fee of $8,160,000 if Ebix terminates due to a change in Yatra's board recommendation, failure to obtain shareholder approval after a recommendation change, or if Yatra terminates to accept a superior proposal. This fee also applies if Yatra enters a definitive agreement for an acquisition within 12 months of termination due to failure to close or shareholder approval.
- Expense Reimbursement: If the merger is terminated due to failure to obtain shareholder approval and the Termination Fee is not payable, Yatra must reimburse Ebix up to $4,000,000 for documented expenses.
Risks: The filing includes a cautionary statement regarding forward-looking statements, noting risks such as the failure to satisfy closing conditions, unexpected costs, legal proceedings, and the potential for the transaction not to be consummated.
Important Facts for Investors to Verify
- Review the upcoming Form S-4 proxy statement/prospectus for detailed financial data and risk factors.
- Verify the outcome of the Yatra shareholder vote required to approve the merger.
- Confirm the status of the reduction of Yatra Warrants to meet the closing condition of 8,768,979 shares.
- Monitor the SEC's declaration of effectiveness for the Form S-4 registration statement.
- Understand the conversion mechanics of Ebix Preferred Stock into Ebix common stock (20:1 ratio).