Acquisitions
| Company | Description | Date | Country |
|---|---|---|---|
| Activity Sector | |||
| Sport Abroad | Sports tours | October 2008 | United Kingdom |
| Teamlink Travel | Student sports tours | October 2008 | United Kingdom |
| Edwin Doran | Student sports tours | November 2008 | United Kingdom |
| Master Yachting | Yacht charters | November 2008 | Germany |
| Off The Piste | Student ski | December 2008 | United Kingdom |
| Adventure Tours Australia | Adventure tours | April 2009 | Australia |
| Williment Travel Group | Sports tours | May 2009 | New Zealand |
| Zegrahm Expeditions | Adventure cruising | June 2009 | USA |
| EAC Language Centres | Language school | July 2009 | United Kingdom |
| Specialist & Emerging Markets Sector | |||
| Travel Adventures | Student travel | October 2008 | USA |
| Accommodation & Destinations Sector | |||
| Aragon Tours | Cruise handling | May 2009 | United Kingdom |
| Mainstream Sector – Northern Region | |||
| Island Cruises | Cruise operator | November 2008 | United Kingdom |
| Total consideration | £89m | ||
In the year, the Group completed 12 acquisitions, including 11 within high-growth niche segments of the leisure travel market in line with its strategy of making ‘bolt-on’ acquisitions of businesses with the ability to generate premium margins and high earnings growth. The 12 businesses were acquired for a total consideration of £89m. For comparison, in the year ended 30 September 2008, we made 16 acquisitions for a total consideration of £109m.
In addition, we announced a further three significant investments in the year. We invested £8m in our joint venture in Russia & CIS, £30m for a 9.9% stake in Air Berlin as part of the transaction between TUIfly (our airline operations in Germany), and Air Berlin and announced that we will invest c.£55m in a strategic venture with Sunwing in Canada.
Strategic venture in Canada
We have agreed a strategic venture with Sunwing, a leading tour operator in Canada. Under the terms of the deal, TUI Travel will contribute its Canadian operations plus C$101m and Sunwing will contribute its operations to the strategic venture. TUI Travel will receive a 49% interest in the strategic venture, with Sunwing’s owners receiving 51%.
The Canadian market has for some time been both challenging and fragmented. The profitability of our operations in this market has been affected by the excess market capacity and in the year to 30 September 2009 the business made a loss of £24m (2008: loss of £5m).
This venture strengthens our position in the Canadian market and we believe that the transaction delivers a number of strategic and financial benefits to the Group. In particular, the Group will earn a share of the profitability of the strategic venture, rather than 100% of the losses generated by the current operations.
This deal is subject to regulatory clearance, which we expect to receive shortly.
TUIfly – Air Berlin Transaction
As part of the transaction between TUIfly, our airline operations in Germany, and Air Berlin, TUI Travel has acquired 9.9% of Air Berlin’s shares.
Russia & CIS
As described above, our Russia & CIS joint venture has completed the acquisition of a 75% stake in certain assets of two businesses and expects to complete the acquisition of a further business shortly.
