Online travel specialist Travelzest has entered into an agreement to purchase the entire issued share capital of Canadian online agency itravel2000.com.
The CAN$51.5m price will be paid partly in cash and partly through the issue of exchangeable shares.
itravel2000.com, a privately owned company, also has a customer call centre in Mississauga, Ontario.
Travelzest is planning to raise £11 million from a debt facility to finance the acquisition which is being provided by Barclays Corporate Leverage Finance.
Shareholder approval will be sought at an EGM on October 5.
Commenting on the acquisition Chris Mottershead, Travelzest’s chief executive, said: “One of the key elements of Travelzest’s strategy is to create a travel group which achieves profits throughout the year.
“itravel2000.com is one of Canada’s largest privately owned online travel retailers, with a long and established track record. It has grown its gross sales from Can$30 million in 2001 to Can$178 million in 2005.
“Importantly, the greater proportion of its business is generated in the winter months when many Canadians like to travel abroad, and will therefore provide counter-seasonal revenue and profit to the predominantly summer-based revenues and profits of Travelzest’s businesses in Europe.”
By Bev Fearis
