Hannover, Germany-based TUI Group (ETR: TUI1) said it agreed to sell Travelopia to New York-based global private equity firm KKR & Co (NYSE: KKR) for an enterprise value of €381 million ($404 million). Travelopia, headquartered in the UK, is one of the world’s leading specialist travel groups, providing unique experiences, such as sailing adventures, tailor-made holidays, sports tours, school expeditions, private jet travel and polar expedition cruises.
The enterprise value equals 14.4 times Travelopia’s 2015/16 underlying EBITA and 7.7 times its underlying EBITDA. In the year ended September 30, 2016, Travelopia generated turnover of €1.17 billion, underlying EBITA of €26m and underlying EBITDA of €50m.
“The high-end experiential travel market is underpinned by attractive structural growth drivers. These include the growing value consumers place on experiences over goods and the increasing mobility of older travelers,” said Mattia Caprioli, Member & Head of Services at KKR Europe. “We believe that Travelopia is ideally positioned to benefit from these trends. We intend to leverage our experience in the leisure and travel sector gained through investments such as PortAventura, Get Your Guide, Trainline, Go-Jek and Apple Leisure, to support management in their strategic initiatives.”
The sale of Travelopia marks another milestone in transforming TUI into an integrated tourism business focused on hotel and cruise brands, as reported last year by ExitHub. The proceeds will be invested in expansion of the growth segments hotels and cruises, says the company.
“The sale of Travelopia is the next strategic step in sharpening TUI’s profile. We consistently continue to focus on becoming a vertically integrated tourism business,” said Fritz Joussen, CEO TUI Group.
Travelopia has a large, international customer base of over 800,000 travelers each year and serves over 70 destinations globally through its 53 brands. The business was previously part of Specialist Group and had been managed as an independent unit since the merger of TUI AG and TUI Travel PLC at the end of 2014.
Will Waggott, CEO of Travelopia, said: “KKR’s experience in the sector, global reach and digital expertise make it the perfect partner for Travelopia as we continue to grow. We have leading brands, loyal customers, deep destination expertise and a highly committed employee base, which puts us in a strong position to address the large and growing experiential travel market opportunity. I am very excited about the next chapter in Travelopia’s history and what it will offer our customers.”
The deal is subject to regulatory approvals and customary closing conditions.
KKR was advised by Catalyst Partners, Rothschild, Simpson Thacher & Bartlett, Dentons, Deloitte & Touche, and Ernst & Young.