Hotelbeds Group has swooped in on its rival, Kuoni GTA, for an undisclosed price.
A statement released today said the Kuoni Group has entered into a binding agreement on the sale of its Global Travel Distribution business division which consists of the main brand GTA and excluding MTS Globe to Hotelbeds Group.
Hotelbeds Group was bought over from the TUI Group last year by a consortium led by Cinven and Canada Pension Plan Investment Board. At the time, the new owners emphasised they were keen to consolidate the wholesale accommodation market, which is highly fragmented.
The shareholders of Kuoni Group will roll-over a large portion of their proceeds from GTA into the combined Hotelbeds/GTA business. In 2016, GTA's gross operating profit was CHF 204 million (US$204.1 million) representing about 34 per cent of total gross operating profit of the Kuoni Group.
The purchase price will consist partially in shares of Hotelbeds Group and partially in cash, to be used mainly for repayment of debt and funding of transaction costs. The shareholders of Kuoni Group, EQT VII (a fund advised by EQT Partners), the Kuoni and Hugentobler Foundation and selected members of the management, will roll-over a large proportion of their equity participation in GTA and, upon completion, will hold a substantial minority stake in the combined Hotelbeds/GTA business.
The parties have agreed not to disclose further details regarding the purchase price or their contract. The acquisition is subject to approval by the relevant competition authorities.
The deal will bolster Hotelbeds. GTA sells around 40,000 room nights per day online, and these are particularly sourced from fast-growing markets in Asia, the Middle East and Africa.
Kuoni Group¹s two other remaining divisions are Global Travel Services, which handles 50,000 leisure tours per year from main source markets in Asia/Pacific, and VFS Global, the world¹s largest visa and passport processing specialist.