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The trials and tribulations of British tourism giant Thomas Cook have failed to dampen optimism in the travel sector, with Helloworld Travel (ASX: HLO) today announcing it has agreed to buy TravelEdge Group for $28 million.
The deal represents an EBITDA multiple of around six times and will be funded by a new bank facility, with the consideration to rise if certain earnings thresholds are met in FY20.
TravelEdge is one of Australia's largest privately-owned corporate travel management companies, with services also including academic travel services, event and group planning and delivery, holiday and leisure services and travel prizing and incentives.
Helloworld CEO Andrew Burnes (pictured) says the acquisition of TravelEdge will allow HLO to expand in the corporate and education travel sectors, while the business complements the company's existing corporate operations in Australia and New Zealand with additional expertise knowledge and capability.
"With nearly 20 years' experience, TravelEdge is a highly respected TMC business that generated over $300 million of TTV [total transaction value] in FY19," says Burnes.
"We will continue to provide outstanding services to TravelEdge's many clients across the corporate and education sectors in Australia.
"HLO's existing TMC [travel management company] businesses include QBT, Show Travel, Inspire, AOT Hotels and in New Zealand APX and with the addition of TravelEdge to our wholly owned TMC operations, our trans-Tasman corporate TTV on an annualized basis will be approximately $1.55 billion in FY20."
He adds Helloworld Business Travel's network of corporate agencies in Australia and New Zealand has a TTV of more than $850 million.
"TravelEdge is a leading specialist corporate travel business and adds great strength to our expanding TMC businesses in both Australia and New Zealand," says Helloworld group general manager corporate Nick Sutherland.
"QBT was recently awarded the corporate travel contracts for News Corp Australia and Foxtel and is expanding in other areas and we look forward to continuing to provide outstanding service to our many corporate clients throughout Australia and New Zealand.
TravelEdge CEO Kim Wethmar, who joined the company four years ago, will continue to run the business from its Sydney headquarters.
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