14 December 2016
Corporate Travel Management Announces New Acquisitions
Leading Australian travel provider Corporate Travel Management (CTM, ASX: CTD) is expanding its global footprint with the acquisitions of UK-based Redfern Travel and Tasmanian-based Andrew Jones Travel.
The GBP40 million (AUD69.0 million) acquisition of Redfern Travel will make CTM one of the top seven corporate travel management companies in the United Kingdom.
CTM Managing Director Jamie Pherous said the Redfern Travel transaction would allow CTM to build and leverage scale, and is expected to take its consolidated European Total Transactional Value (TTV) to GBP500-550 million (AUD860-950 million) in the next financial year.
“Redfern Travel’s key competitive advantage is its proprietary, automated end-to-end system, which processes more than 95 per cent of all transactions online, creating a highly scalable operation,” Mr Pherous said.
“Redfern meet CTM’s strict acquisition criteria as they possess a highly experienced and passionate management team, are leaders in innovative technology, and will create opportunities for growth in the UK and European markets.”
Redfern Travel CEO Mark Bowers said the partnership was a natural fit, as CTM’s focus on innovation aligned with its strategic vision, and together will help to accelerate the development of its technology.
“It is refreshing to be working with a like-minded company who values innovation and customer service; we are confident our partnership will deliver rapid client innovation, scale and a global servicing network to our government and corporate clients,” Mr Bowers said.
The AUD5.6 million acquisition of 30-year-old Andrew Jones Travel will cement CTM as the second largest corporate travel management company in Australia, and allow the company to expand its position in the government and sporting industries.
“Andrew Jones Travel is a long-standing and well-regarded corporate travel company, and operates on the same core systems as CTM, allowing for seamless integration and synergy,” Mr Pherous said.
“With its niche in national sporting bodies and government departments, and location in a valuable region for aquaculture and export, we are confident Andrew Jones Travel will easily integrate into CTM’s Australian network.”
Andrew Jones Travel Director Andrew Jones said “I am delighted to be joining forces with CTM. Their scale, global network and vast array of customer facing technologies can only benefit our client base. I have known Jamie and the senior management team for many years and we have been impressed by how entrepreneurial the company remains during their growth in the Australian market.”
Mr Pherous said CTM was committed to a strategic acquisitions approach, where potential partnerships were rigorously assessed to ensure a natural cultural and management fit for the business.
“These acquisitions will deliver increased benefits for our global network of travel management providers, allowing us to leverage growth and scale in the UK and Australian markets, and offer a return on investment for our clients,” he said.
Collectively, the two acquisitions are expected to contribute approximately AUD7.0 million EBITDA from February to June, 2017. On an annualised basis, Redfern Travel and Andrew Jones Travel would contribute to CTM approximately AUD17.0 million.
As a result of both performance to date and the projected impact of these acquisitions, CTM has raised its full year EBITDA guidance range to AUD92-97 million (GPB53-56 million).
The acquisitions will be funded by a fully underwritten renounceable Entitlement Offer to raise approximately AUD71.1 million. Eligible shareholders will be able to purchase one fully paid ordinary share for every 21 CTM shares that they hold on 19 December, 2016.
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