RETAIL travel franchise Helloworld Travel (ASX: HLO) has entered an agreement to acquire the Magellan Travel Group for $32.5 million.
The transaction will take place through a wholly-owned subsidiary of the group, and pending formal execution will be funded by 65% cash and 35% HLO shares.
Helloworld CEO Andrew Burnes says his company will welcome 130 Magellan agents into the fold as it looks to consolidate its position in corporate travel and retail.
"Magellan has been established for nearly ten years and has a great network of members in both the leisure and corporate agency business," says Burnes.
"Adding the Magellan network to the Helloworld Travel Group will improves the scale of our operations throughout Australia and give Magellan members the opportunities to take advantage of that scale."
Under the terms, Magellan managing director Andrew Macfarlane will join Helloworld as will the rest of the Magellan management team.
Burnes revealed that many of the agents who currently work for Magellan are previous Helloworld employees that will be returning to the company.
"I congratulate Andrew Macfarlane and the founding shareholders of Magellan for building what is a great network of agents we are delighted to welcome them to the Helloworld Travel family," says Burnes.
"Many of these agents were originally with Helloworld and its predecessors in years gone by and with the significant changes we have made in the Helloworld business over the last two years we are looking forward to welcoming them back."
The sale is expected to be finalised next month and will increase the group's network by 2,300 members across Australia and New Zealand.
The Magellan network will continue to operate in its current format and will be the sixth retail network of Helloworld Travel in Australia.
Business News Australia
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