- Kohlberg Kravis Roberts & Co L.P. acquires specialists unit for an Enterprise Value of 381 million euros1
- Marks further milestone in TUI’s strategic development
- Transaction generates significant value for the Group
- CEO Joussen: “Important step to sharpen TUI’s profile, proceeds will be invested in further growth of hotel and cruise portfolio.“
TUI Group has reached an agreement with Private Equity firm KKR to sell Travelopia. KKR acquires the unit for an Enterprise Value of 381 million1 euros (325 million British pounds). The Executive Board and the Supervisory Board of TUI Group approved the disposal in Hanover today. The Enterprise Value equals 14.4 times Travelopia’s 2015/16 underlying EBITA2 and 7.7 times its underlying EBITDA2. Based on this valuation, the transaction generates significant value for the Group and its shareholders. The transaction is subject to the relevant regulatory approvals.
The sale of Travelopia was announced in May 2016 and marks another milestone in transforming TUI into an integrated tourism business focused on hotel and cruise brands. The proceeds will be invested in expansion of the growth segments hotels and cruises. Fritz Joussen, CEO TUI Group: “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. Both the Group and its shareholders benefit from the negotiated result. We have ambitious goals and want to take the TUI brand into new regions in the world in the coming years. A clear strategic direction supports this course.”
Travelopia was previously part of Specialist Group and comprises a portfolio of more than 50 specialist travel brands. It had been managed as an independent unit since the merger of TUI AG and TUI Travel PLC at the end of 2014. Due to their differing business models and strategic focus, there is little vertical integration with the core Tourism businesses. The potential impact on profitability and the large amount of brands were the basis for the decision not to combine the portfolio under the TUI brand.
The unit has been treated as discontinued operations in the results of TUI since 30 September 2016. In the year ended 30 September 2016, Travelopia generated turnover in the TUI AG accounts of €1.171 billion2, underlying EBITA of €26m2 and underlying EBITDA of €50m2.