Ebix Acquires Mercury Travels and Leisure Corp; Naveen Kundu To Lead New Entity Ebix Mercury

by  EVENTFAQS Bureau Industry Watch | August 3, 2018 | News

Mercury Travels Leisure Corp Ebix

Ebix, Inc., a leading international supplier of On-Demand software and E-commerce services to the insurance, financial, healthcare and e-learning industries, has announced that one of its Indian subsidiaries has signed agreements to acquire Mumbai based Mercury Travels and Delhi based Leisure Corp for a cumulative amount of approximately $14.2 million, with the goal of creating a new Travel Division to focus on a niche segment of the travel market.

The new Travel Exchange named Mercury - An EbixCash Luxury initiative will focus on the luxury, events and sports-related traveller and will be led by the Leisure Corp Founder Naveen Kundu. The Mercury Exchange will have the following three tightly integrated components –

- Mercury Travel’s entire corporate, leisure & adventure related travel business with the exception of its Forex business
- Leisure Corp’s entire sports and events related travel business (MICE)
- Via.com’s events based travel business (MICE)

Mr Naveen Kundu will hold 15% shareholding in this new Mercury initiative, while Ebix will have a controlling 85% share in the venture. Mercury’s Forex business will be integrated into EbixCash’s existing CDL Forex exchange business.

The acquisition of Mercury and Leisure Corp will increase the employee strength of Ebix in India by around 400 employees to approximately 7,600 employees. With the creation of this new luxury Mercury Division, Ebix will now have two brands in travel focused on different niche audiences – Via and Mercury.

Ebix believes that the Mercury business initiative can continue to grow at the rate of 20% or more annually with operating margins of 30% or more, once fully integrated. Ebix expects the acquisition to be immediately accretive to its earnings and forecasts 9 cents in increased Diluted EPS, once the acquisitions are fully integrated over the next 6 months. Ebix funded the acquisition using its internal cash reserves and did not use any investment bankers for the transaction.

Incorporated in 1948 as an Oberoi Hotel Group Company, Mercury is a popular luxury travel brand with a pan India Network of 40 Preferred Sales Agents (PSAs), 20 Branch offices across 16 major cities in India, 350 employees, and an Extended reach in international markets through marketing offices in London, Hamburg & Frankfurt. Amongst other travel related services like Events based travel and insurance, Mercury also has a Foreign Exchange business serviced through its AD-II license issued by the Reserve Bank of India.

The Company is also seen as a leader in the adventure space, with specialization in organizing adventure safaris, sea water rafting and Himalayan expeditions. The Company also owns an adventure hotel property through its Mercury Himalaya Expo joint venture.

Mercury has multi-year contracts and associations with airlines, bus operators, hotels etc. besides having a client base that includes leading names like the Oberoi Hotels chain and the Mahendra Group. Mercury also has 54 franchisee partnerships for undertaking money-changing activities, with leading hotels like Hyatt, Oberoi, Imperial etc.

Incorporated in 1997, Leisure Corp today is one of India’s leading players in the Events related travel space (MICE) & Luxury Trains and Luxury travel, with a focus on the insurance and financial sector & incoming Luxury travellers. The Company’s core competency is to provide a customized range of services from conceptualisation, design, budgeting, planning to execution of large corporate meetings and conferences, involving thousands of attendees. The Company also specializes in creating tailor-made packages for the sports travellers, with exclusive travel agent rights from India for premier world sports events like the recent FIFA Football World Cup in Russia and the 2019 ICC Cricket World Cup in London. Leisure Corp has an exclusive tie-up with Luxury Train travel in India with Palace on Wheels, Maharaja’s Express and Golden Chariott. It is poised to become the market leader in Luxury inbound train travel by 2020.

Leisure Corp has an impressive client base spread across the insurance and Finance sector in India, including Companies like ICICI Bank, Axis Bank, Yes Bank, HDFC Bank, ICICI Prudential Life Insurance, Max Life, ICICI Assets Management, GE and Honda etc. The Company has a rich history of partnerships with many renowned hotel chains like Four Seasons, Ritz Carlton, W Hotels and the Leading hotels & Resorts of the World.

Ebix intends to consolidate these two acquisitions into its Financial Exchange - EbixCash while bringing significant synergies and redundancies to the combined operation. The acquisition of the Omni-channel Business would further strengthen Ebix’s position in the Financial Exchange market in India, as travel transactions can be one of the key areas of any leading financial exchange, with an estimated user base of 600 million in India alone.

“I am excited to join the Ebix family and lead EbixCash’s new Mercury initiative. With affluence and an upper middle class continuing to grow in India, it is time to have a travel exchange that can provide high standards of service and luxury like never before to this section of the society.” Naveen Kundu, Founder and Managing Director of Leisure Corp said. “I have spent my career conceptualising and implementing creative event based travel programs for the corporates, sports enthusiasts and the adventure travellers. We will now try to blend that expertise and niche focus, with our focus on luxury and creating new white labelled travel properties.”

Ebix Chairman, President and CEO Robin Raina said “Mercury has built a reputation for itself in the affluent luxury marketplace with its levels of service, built around the high standards associated with an effort backed by the Oberoi Hotels chain. Leisure Corp is a leader in the events based travel business space with a clear focus on the financial and insurance industries. We are excited to be able to bring these two leading companies together, with the goal of creating a pioneering luxury travel initiative. Between this Mercury initiative and our existing Via.com travel initiative, EbixCash is now uniquely positioned as a Financial Exchange that has end-to-end travel solutions for all sections of the society.”

Via is recognized as a leader in the travel space in India, besides being the only profitable Travel exchange out of all its peers, while having grown at a CAGR of 45% over the last 3 years. The Via distribution network encompasses over 85,000 agents in India, 14,700 agents in Indonesia, 9,900 agents in the Philippines, 600 agents in Singapore and 350 agents in UAE and Oman. Besides being one of the leaders in the space in India, the Company has emerged as the largest travel solutions provider in the Philippines also. With a hotel inventory of over 500,000 hotels and one of the largest ticketing platforms expanding across corporates and distribution outlets, Via has a significant share of the domestic & international airline ticketing business. Via has more than 5% share in both domestic & international airline ticketing in India, 10% in the Philippines, 2.7% in Indonesia, 2.1% in Singapore.