MEDIA group Flextech has ended months of speculation about the future of TVTravel Shop by selling a 38% stake to Barclays Private Equity for £20m.
Under the new deal, Flextech owns 49.5%, BPE 38% and founders Harry Goodman and Denis Strauss retain their combined holding of 12.5%. The sale values TVTravel Shop, which has been trading for only 18 months, at £52.6m.
Every major operator except Thomson was interested in taking a stake in TVTravel Shop. Airtours had been favourite to clinch a deal but Goodman said the company decided it wanted to remain independent.
“We felt if we were part of a major company we would lose our independence and make other companies wary of us,” said Goodman. “Now we are free to do deals with anyone, that is our great strength.”
TVTravel Shop’s turnover in the year to September 30 was £72m and the figure is expected to treble during the next financial year.
The cash from BPE will be used to invest heavily in the company, which is likely to be floated within three years.
BPEUK managing director Stephen Welton said: “TVTravel Shop has a greater reach than almost any other holiday distributor. It has an advantage in a route to market that has high barriers to entry. The business has the potential to become a valuable strategic asset.”
Goodman said TVTravel Shop will be going interactive and will have a Web site within the first three months of 2000.
Flextech chairman and chief executive Adam Singer added:”The opportunities for TVTravel Shop’s potential in terms of interactive TV and the Internet are enormous.”
There are also plans to broadcast in Europe and the company will be seeking partners in mainland Europe.