Online travel agency On the Beach Group has bought a counterpart – through one of its subsidiaries – in a deal worth up to £20m.
On the Beach Travel is behind the acquisition of Classic Collection Holidays. The company packages luxury beach trips and sells its packages through a network of third party offline agencies, including independent high street agents and homeworkers.
Classic Collection employs 124 staff at its Worthing headquarters and reported EBITDA of £2.6m and gross assets of £18m in its statutory audited accounts for the 12 months to 31 October 2017.
The acquisition represents a continuation of On the Beach's strategy. The group now plans to invest to grow Classic Collection's portfolio of luxury holidays, and will also put money towards building and launching an online booking portal to provide travel agents with access to a portfolio of mainstream beach holiday products under a new Classic Online brand.
The total consideration will be £20m, made up of £14.6m cash on completion, £2.7m cash which will be deferred for 12 months post completion and £2.7m in shares.
Classic Collection is currently owned by its managing director Nick Munday, its directors and a number of small private shareholders.
Munday said: "I am thrilled to be joining forces with Simon and the team at On the Beach. Partnering with such an innovative market leader will give our loyal network of agents access to an even wider portfolio of mainstream beach holiday products through the launch of Classic Online, together with further investment to broaden the luxury offering of Classic Collection."
Simon Cooper, chief executive of On the Beach Group, added: "We are excited about the opportunity to access the circa five million short haul beach customers that book holidays offline each year. Classic Collection has an excellent reputation in the industry and we look forward to working with Nick and the team to expand both of our product offerings."
On the Beach also issued a trading update for the 19 weeks to 15 August 2018, with the exceptionally hot UK weather, combined with the FIFA World Cup, suppressing holiday demand.
"This has impacted our headline revenue growth during the period but the weaker demand has driven a significant reduction in the group's marketing spend, ensuring growth in revenue after marketing costs has remained strong," it said.
"While August and September are important trading months for the group, the board continues to expect that adjusted PBT for the financial year will be broadly in line with management expectations."
