The Thomas Cook Group has announced the acquisition of a majority stake in Gold Medal International.
The group has bought a 50.01% stake in the flight consolidator and tour operator for £24.9 million from Gold Medal founder and sole shareholder Ken Townsley.
The deal remains conditional on competition clearance, which is expected to be obtained in the first quarter of next year.
The deal will entail Gold Medal managing Thomas Cooks’ Flight Savers business, which provides scheduled flights to the Thomas Cook sales distribution network in the UK and Ireland.
Flight Savers achieved gross sales of £90.4 million for the year ending September 30, 2008, and it is intended that both the Gold Medal and Flight Savers businesses will continue to operate as stand-alone entities. However, annual synergy savings in excess of £4 million are predicted as a result of the move.
Gold Medal’s management team, including managing director and former Going Places managing director Terry Fisher, will report directly to Thomas Cook Group chief executive for independent travel for UK and Ireland Ian Derbyshire.
The deal has also been structured to allow Thomas Cook to buy the remaining shares from Townsley from March 31, 2010, although the maximum payment has been capped at £87 million.
As well as offering flights and owning a tour operation, Gold Medal has accommodation in 1,500 worldwide destinations with a strong focus on the US, Far East and Australasia, having been founded in 1984.
Profits for the year ending March 31, 2009, are expected to be more than £9 million.
Thomas Cook Group chief executive Manny Fontenla-Novoa said: “The acquisition of Gold Medal is a very good opportunity to strengthen significantly our position in the important independent travel sector.
“Through Gold Medal we have access to excellent product, great technology and highly experienced travel agents, and I believe that we have secured a financially attractive transaction with appropriate incentives for existing management to deliver further value in the business.
“I have great confidence that this acquisition represents excellent value for the group and will drive further synergies and customer benefits.”
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