Lastminute buys Travelselect for £9m

Monday, 08 Apr, 2002 0

Lastminute.com chief executive Brent Hoberman has told TravelMole that the £9m purchase of flights provider Travelselect.com “makes sense across all metrics.”

The company will issue £9m in new shares for Travelselect, its first large scale acquisition in the UK, which Mr Hoberman pointed out would make an “an immediate positive contribution to operating cashflow.” In addition to the initial consideration, lastminute.com will pay up to a further £3m depending on the EBITDA achieved for the year to 31 January 2003.

The deal triples triples lastminute.com’s existing UK flights volume creating a UK flights revenue stream of approximately £50 million and providing access to a further 39 airline relationships as well as giving online access to Eurostar.

Crucially, it also moves the company’s flight offering up to a similar scale as lastminute’s hotel portfolio ahead of the addition of dynamic packaging to the site later this year. Mr Hoberman told TravelMole: “We are already growing at 110% year on year and this deal makes sense across all metrics. It will particularly help when we introduce dynamic packaging later in the year.” According to Atinera’s Stuart Winter, the ability to put together holiday packages is going to prove crucial to online travel sites as suppliers take control of their own inventory and commission levels fall. See this week’s TravelMole Interview.

Travelselect.com and sells approximately 200,000 flight tickets annually with internet bookings generated exclusively online accounting for 80% of total transactions. It currently has 87 full time employees based in London.

Vimal Khosla, majority shareholder and Chief Executive of Travelselect.com Limited, joins the lastminute.com plc Board as an Executive Director. He said: “We are delighted to become part of such an exciting and progressive business. The joining of lastminute.com offers great opportunity to grow the flights area of the combined businesses dramatically. There is significant potential to enhance the product range to our travel agent customers through the Globepost brand.”

See out previous stories:
28-Mar-2002 Online travel continues to grow
19-Mar-2002 The TravelMole Interview: Helen Baker, Lastminute.com
18-Feb-2002 Research shows strong growth for European travel sites
8-Feb-2002 Lastminute reports strong Q1 results