Western and Oriental has today announced its acquisition of online luxury tour operator Key2Holidays for £1.7 million.
The acquisition payment is being satisfied by a cash payment of £1.2 million and the issue of 4,761,905 shares in Western and Oriental, representing £500,000 based on the closing share price of 10.5p per share on July 25.
A further £1 million will be payable for the company if the gross profit of the year ending September 2008 shows an increase of 25% on the gross profit of the year ending September 2007.
Key2Holidays, which specialises in travel to the Middle East and the Indian Ocean, will be relocated from its offices in Shoreditch, London, to Victoria, with the move expected to lead to immediate cost savings and increased profitability.
Following the deal, Key2Holidays managing director and sole shareholder Rajinder Kumar has been appointed business development director for the Western and Oriental group and also joins its board.
Western and Oriental chairman David Howell said: “Key2Holidays is an excellent addition to the Western and Oriental group and adds significant volume, particularly to the Middle East, as well as an online booking capability to the group.
“This is the eighth acquisition we have made since our float in March 2006.”
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