Stella bags Travelbag
Aussie travel services and hospitality company Stella Group has announced it has completed the acquisition of leading UK-based long-haul travel retailer Travelbag for £7.3 million ($17 million*).
The acquisition price represents a multiple 3.9 times EBITDA with Travelbag forecasting a total turnover of more than £150 million ($350 million) in the year to 30 June, 2008.
The acquisition will be will earnings accretive and contribute to Stella’s previously forecast EBITDA of at least $200 million for the full year to 30 June, 2008.
Stella Travel Services Chief Executive Officer Keith Stanley said the acquisition would further strengthen Stella’s distribution capabilities in the UK, where it now has more than 90 retail outlets consisting of 83 Harvey World Travel shops and eight Travelbag outlets.
“Travelbag’s long haul, tailor-made expertise and focus on providing exemplary service to the consumer will provide Stella with another great opportunity to develop its globally integrated travel services model.”
“Stella’s UK business has developed a specialist focus on long haul ‘big ticket’ destinations, and the acquisition of Travelbag with its high profile brand and retail presence will provide an opportunity for us to further develop the business.”
“Travelbag is a great fit with Stella’s current business and will bring considerable benefit to us as we grow the UK business.”
The acquisition will deliver a 60% increase in the Total Transaction Value (TTV) of Stella’s UK business, with further synergies to be realised through the utilisation of common product-sourcing teams, single shared services support functions and transfer of skills and know-how between brands.
Stella has also purchased Travel 2 Travel 4 in the UK from Travelport, with extensive similarities between the businesses expected to aid integration.
The businesses will also be integrated with the Harvey World Travel network under Stella Travel Services umbrella.
Keith Stanley said Travelbag Managing Director Rick Weber and the senior management team will remain in the business.
Travelbag is regarded as a UK expert in Australia and Asian travel markets and will further enhance Stella’s distribution network for its Australian, New Zealand and African hotels and resorts.
Stella Group’s existing Australian and New Zealand portfolio comprises approximately 15,000 rooms under the brands Mantra, Peppers, BreakFree and Saville, with a further 9,000 rooms added with the recent settlement of the $255 million acquisition of Africa’s Protea Hotels.
Report by The Mole
John Alwyn-Jones
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