Travelport is to sell its ground content wholesale business, Gullivers Travel Associates (GTA), to Kuoni for $720 million.
The sale, scheduled for completion in May, is dependent on the majority approval by Travelportâ€™s bank lenders and a vote by the shareholders of Kuoni.
The Kuoni and Hugentobler-Foundation, which represents 25% of the voting rights of Kuoni, has already committed to vote in favour of the capital increase to fund the deal.
Kuoni Group CEO Peter Rothwell said: â€œIn acquiring GTA, Kuoni is investing in one of the fastest-growing business segments within the tourism industry.
â€œThis acquisition, together with our own proven, growing and successful online destination management activities of Kuoni Connect, will transform us into one of the leading global providers of online destination management services.
â€œIn line with our asset-light strategy, the combination of GTA and Kuoni will create a better balanced Group, providing additional strength in the growing area of business-to-business online services and enlarging Kuoniâ€™s Destination Management leisure group business.
"GTA has a skilled and valuable workforce that will be invaluable as the business continues to develop.â€
Jeff Clarke, CEO and president of Travelport, said the sale was in line with its strategy of focusing on its core businesses.
â€œKuoni is a well known and long-term customer of Travelport and our aim will be to work in partnership with them to improve further the distribution and sale of the combined Kuoni/GTA inventory across the Travelport subscriber network,â€ he said.
The net proceeds from the sale will be used to pay down Travelport bank debt.
As at September 30, 2010, on a pro forma basis for the proposed sale of GTA, group net debt was $2,761 million.
Travelport will report earnings for the year ended December 31, 2010 on March 30, 2011, when it expects to report adjusted EBITDA of $545 million and net revenue of $1,996 million for Travelport, excluding GTA.
By Bev Fearis
Monday, March 7, 2011
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