India-based online travel services provider MakeMyTrip on Thursday said it will acquire 79% stake in Singapore-based travel agency Luxury Tours and Travel (LTT) for $3 million to expand its presence in markets outside India.
The company, which also announced an over two-fold increase in its net profit for the quarter ended December, 2010 at $1.62 million from the same quarter of 2009, said it has the option of increasing the stake in LTT in future.
"MakeMyTrip will also invest approximately $0.75 million in addition, in one or more tranches until June 2012, for the subscription of new equity shares to be issued by LTT," it said.
Further, the travel portal will acquire from the existing shareholders, their remaining shares in LTT, in three tranches over a three-year period ending June 2014, it said.
The payment under each such tranche will be made in cash, based on valuations linked to actual profitability of LTT, it added.
"The acquisition is a major strategic move, since it broadens our presence in other emerging markets beyond India. South-east Asia region is a highly popular destination of choice for Indian travelers and among the biggest and fastest growing markets for our outbound tours and packages business," MakeMyTrip chairman and CEO Deep Kalra said.
For the quarter ended December 2010, the company's sales grew 56.7% at $35.79 million, compared to $22.84 million in the same period of 2009.
"Our strong financial performance reflects the robust growth in air and holiday travel during the seasonally strong quarter," Kalra said.
Going ahead, the company is optimistic in its long-term outlook with strong travel demands experienced in the third fiscal quarter.
MakeMyTrip expects 2011 revenue less service cost to be between $59 million and $61 million.
"We believe our continuous focus on improving our customers' booking experience, providing innovative travel products and strengthening supplier relationships will continue to make us the Indian online travel portal of choice for the growing middle class population of India," Kalra added.