Helloworld Travel (ASX: HLO) has tapped into the Nordic love affair with South Pacific holidays by acquiring more than a third of Australiareiser, Norway’s largest specialist travel group to the region.
The cost of purchasing the 34 per cent stake in Australiareiser has not been disclosed, but Helloworld says the deal will be earnings accretive in FY24.
Helloworld is only revealing that the acquisition has been struck at five times Australiareiser's forecast EBITDA for FY23, which aligns with the calendar year.
The Oslo-based company was founded by Rolf Kjeseth in 2005 and has since grown to become the largest specialist travel wholesaler from Scandinavia to Australia, New Zealand and the South Pacific.
Australiareiser ('reiser' means 'travels' in Norwegian) has offices in Oslo, Copenhagen and Stockholm, giving it access to the entire Scandinavian market.
The group operates six brands, including Fijireiser, Private Travel Lab, Gruppe Rundreiser and Workations, offering tailor-made tours for groups and individuals.
The acquisition stems from a legacy association following Helloworld’s $270 million merger with AOT Group in 2016. AOT’s ties with the Norwegian group were inherited via its acquisition of ATS Pacific from Jetset Travelworld in 2014. ATS Pacific had a relationship with Australiareiser since the company’s inception in 2005.
Helloworld says the acquisition of Australiareiser will be funded from existing cash reserves, with the deal expected to settle at the end of this month.
CEO Andrew Burnes also says Australiareiser will become the launch customer in Europe for the company’s mid-office system, known as ResWorld, which is designed to streamline leisure travel offerings for retail travel agents.
“We have spent the last five years developing this system for our agency networks in Australia and New Zealand and it is now at a point where we can take it to other countries and deploy it,” says Burnes.
“From Scandinavia, we will be showcasing the functionality of ResWorld to potential customers across continental Europe and the UK and providing access to the system for retailers and wholesalers across these markets.”
Kjeseth welcomes Helloworld’s investment in his company which he says cements the extended relationship the companies share.
“We have been working with ATS and HLO for a long time now,” Kjeseth says.
“During this period, we had the opportunity to explore the new ResWorld system that HLO has developed, and it is a first-class product in our view and perfectly suited to our business in Europe.
“We will be implementing it in the next few months and are delighted to be the launch customer for this new mid-office system in partnership with Helloworld.”
The ResWorld platform is currently deployed by Helloworld in more than 160 agencies in Australia and New Zealand, accounting for more than 500 registered users. Helloworld expects this number to more than double over the next year.
Helloworld adds that its collaboration with Australiareiser has helped it refine the ResWorld system further ahead of its European rollout.
Helloworld returned to profitability in the latest half year amid surging demand for domestic and international travel that saw its total transaction value triple to $1.2 billion for the six months to the end of December.
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