South-African media conglomerate Naspers owned MIH Group has acquired majority stake in six years old Gurgaon-based travel company Tek Travels which runs the B2B travel portal Travel Boutique Online .
Tek Travels was started by Gaurav Bhatnagar and Ankush Nijhawan in 2005. Both the founders hail from the technology background where Bhatnagar is an IIT Delhi alumnus and Nijhawan studied in Bryant University.
The portal Travel Boutique Online was started in 2006 and mainly deals with the B2B travel needs. It provides air & train tickets, besides hotels, bus or car booking, visa enquiry, travel insurance and even chartered planes and helicopters for the B2B segment.
The company has created a neat business in a short period of time. According to VCCEdge, he financial research arm of VCCircle, Tek Travels has been profitable since early days of launch. The company has grown its revenues three fold between FY08 and FY11 to Rs 70 crore and clocked net profit of Rs 2.2 crore for the year ended March 31, 2011.
A close industry peer would be International Travel House Ltd, a public listed associate firm of diversified consumer goods and services giant ITC Ltd. For FY11 International Travel House recorded revenue of Rs 146 crore with net profit of Rs 16 crore. The company has a market cap of Rs 152 crore, or 9.5x its one year old earnings.
If this is taken as a benchmark, Tek Travels could be valued around Rs 21 crore or more factoring in control premium by the acquirer. In such a case, 51 per cent stake would have translated into a deal worth $2 million or more, as per VCCircle estimates.
Economic Times, which confirmed the news from the company, hinted at the deal amount being in tens of crores.
What’s in it for MIH Group? It already runs a travel portal through ibibo as Goibibo.com. This deal could be aimed at strengthening the business further with an established B2B travel management firm. For Tek Travels the acquisition could mean more exposure to the international markets.