Since the disruption of the pandemic, unusual times in travel M&A (mergers and acquisitions) have kept many commentators guessing what’s to come. As lockdown shrinks further in the rear-view mirror, Stewart Lambert, Co-Founder of the Firebird Partnership, gives an insider take on the trends and transactions happening at the start of 2024.
Back in April, I wrote about some of the interesting M&A trends we had been seeing in the travel sector, with investor wariness competing against pent-up demand for transactions in the system overall. Nine months on, how much has changed?
“A number of deals have taken place, but not as many as expected”
In my last article I predicted a very active time in the M&A market towards the end of 2023 and start of ’24. In fact, a number of deals have taken place during this period, but not as many as I expected – with the proportion of super high profile transactions staying relatively modest since spring (principally Mr & Mrs Smith’s sale to Hyatt in June 2023).
Across the market overall we’ve begun to see a fair number of growth capital deals being completed. Probably the most high profile of these was Flash Pack, which raised £5 million from JamJar investments in Autumn – a major success story given the company had filed for bankruptcy in 2020. In the same month, online platform tourhub secured a £1 million investment from venture capital firm Waterspring.
At the end of August, Firebird client Artisan secured major financial backing from Panoramic Group Equity as part of realising ambitious growth plans. In September, Diversity Travel also achieved investment through private equity, kicking off a new period of growth with the backing of PE fund Primary.
In November, Clarity – the Business Travel and Events division of the Portman Travel Group – completed its acquisition of Agiito, the corporate travel management company. Also in November, new luxury brand Travel Seen acquired a majority stake in Aquilium Travel, while simultaneously investing in events specialist Vedere; a business which launched to the market shortly after.
Hays Travel has been a similarly active buyer recently, celebrating acquisitions of Just Go Travel and Travel House in the past few months, as well as Holiday With Us only last month. Elsewhere, the Gray Dawes Group completed a new year deal for the Netherlands-based VCK Travel, following earlier expansions through M&A in the US and Australian markets.
Over Christmas, Solmar Villas sold to Kuoni’s parent company Der Touristik, which reported being “open to further acquisitions if the opportunity was right.” In the first week of January, Travel Counsellors acquired the travel tech platform Planisto, in part to strengthen TC’s own tech offering. While more recently, in the first week of February, the announcement of a forthcoming sale of Hotelplan by Swiss supermarket owners Migros sparked early investor interest in Hotelplan's various brands.
“In terms of identifying trends, we see the same ‘hot buttons’ being pressed”
Looking closer at the ins and outs of this activity, my general observations remain the same as they were back in April: that we’re continuing to witness the rise of new buyers, in terms of smaller groups looking to make acquisitions; that large corporates are still being fussy in terms of where they’re investing; and that PE houses remain attracted to the travel sector, albeit with some caution – many are still waiting to see how factors such as mortgage rises and the cost of living affect the travel industry in the medium term.
When it comes to identifying recent trends in transactions, we also see the same “hot buttons” being pressed, with the same themes and elements that previously appealed to investors still forming the crux of various deals.
As ever, these include:
High repeat booking rates
With multiples also being driven in many instances by:
The demand for experiential travel
A focus on the 50+ demographic
Any presence in North America, thanks to the market’s size and high propensity to spend
Meanwhile, as before, being bloody big always helps!
“We’re aware of a huge number of deals in the market at the moment”
Looking ahead, it’s clear that a rush of transactions remains in the pipeline. Whether these happen before 2025 remains to be seen – though I personally wouldn’t be surprised to observe a large volume of deals this year; including the highly-publicised pending sale of The Appointment Group (TAG). The upcoming general election will no doubt play a part in transaction plans for UK businesses. Indeed, some Firebird clients who were contemplating an exit in 2025 have brought those processes forward by 18 months because of concerns about the risk of a rise in Capital Gains Tax rates.
Within Firebird alone we’re handling four transactions that we anticipate completing in the next few weeks and months. We’re also aware of a huge number of deals that are in the market and/or being transacted at the moment, along with those currently being considered by travel companies exploring their options.
If you’re one of those travel companies, the usual, all-important rules apply. Owners need to make sure their data is good, that their proposition is clear, that they understand their balance sheet and KPIs, that they have built up their management team, and – above all – that they have knowledgeable advisers they can trust.
In what is now becoming an increasingly active market, getting on top of these elements will ensure you’re in the best position to entertain any choice offers that come your way.
Stewart Lambert is co-founder of the Firebird Partnership, with nearly 25 years’ experience in corporate finance, advising owner managers on selling their businesses, raising finance and making acquisitions.
Learn all about Firebird and get in touch at www.firebirdpartnership.com
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