CrowdWisers™--- the subscriber area has no ads and those above are not selected or endorsed by this site ---
Ebix finalizing Yatra buy +3
08:31 19-Jul-19
The Ebix/Yatra conference call is ongoing, but it adds little
over and above what was already projected. The plan is to combine
networks and cross-sell once the transaction closes, towards the
end of this year. That should not be subject to any antitrust
approvals or an Ebix shareholder vote.
In retrospect, I suppose it is not surprising that Ebix shares
are down since the transaction was announced. We're looking at
just above 10% increase in EPS in return for 16% dilution a year
or more from now, and the market has not been showing any faith
that Ebix will succeed with such plans. Nonetheless, I think Ebix
represents a better chance at high growth and return than market
pricing implies. I am switching over the the Schlumberger call.
A press release was just issued saying that Ebix is finalizing its purchase of Yatra for $4.90 per share. Ebix will be issuing 243,747 convertible preferred stock, which in turn will be convertible into 4,874,931 shares of Ebix common stock and represents about 16% dilution. In return, the addition should improve Ebix's bottom line by 40-75 cents per share within the next year. A joint conference call should follow in the next few days. The rupee has pulled back slightly of late, but is holding near its recent highs, even as mainstream economies are looking a bit stronger for the moment. Nonetheless, I'm relieved at the lower price and expect the market to react positively.