In what we would like to call it as a sad end to a journey, Yatra has announced that the company will merge with Terrapin 3 Acquisition Corporation (TRTL).
TRTL is a special purpose acquisition company formed for the purpose of effecting a merger, acquisition, or similar business combination.
Yatra will be the surviving company in the transaction and intends to be listed on the NASDAQ Stock Market under the symbol "YTRA" following completion of the transaction. The combined company will continue to be led by Yatra's experienced management team under the leadership of chief executive and co-founder Dhruv Shringi.
Yatra customers booked more than 2.8 million air travel reservations and hotel stays with total transaction value worth more than $900 million (at current exchange rates) during their fiscal year ended March 2016, an increase of 25% from the prior year (at constant currency rates) with 74% of transactions coming from repeat clients who return to book more travel.
Summary of Transaction
TRTL raised $212.75 million in its IPO which is now held in a trust account. MIHI LLC, an affiliate of Macquarie Capital ("MIHI") has committed to purchase an additional $20 million of TRTL equity as part of the transaction. Under the terms of the proposed transaction, it is estimated that the current shareholders of Yatra will continue to own at least 35% of the issued and outstanding shares in the combined company. The first $100 million of cash (including MIHI's $20 million forward purchase) will be allocated entirely to the combined company's balance sheet and to pay transaction expenses.
Any amount greater than $100 million available from TRTL will then be allocated 80% to current Yatra shareholders and 20% as cash to the combined company's balance sheet. Cash payments to current Yatra shareholders will be capped at $80 million.
In addition, existing shareholders of Yatra may receive additional consideration of up to $35 million upon the achievement of certain financial objectives during the 18 months after closing.
In order to facilitate the transaction, TRTL's sponsors have agreed to reduce by half the number of founder shares that they would have otherwise had at closing and MIHI has agreed commensurately to reduce the amount of its forward purchase of TRTL shares, made at the time of TRTL's initial public offering, from $40 million to $20 million.
The boards of directors of both TRTL and Yatra have approved the proposed transaction. Completion of the transaction, which is expected in October 2016, is subject to approval by TRTL stockholders and other customary closing conditions.