The importance of private equity investment to the UK travel sector was brought into sharp focus by a flurry of deals this week.
Corporate travel company Reed & Mackay acquired rival Hillgate Travel for an undisclosed amount in a private-equity (PE) backed deal.
PE investor Livingbridge bought online travel agent (OTA) Love Holidays, one of the UK’s fastest-growing travel retailers, in a deal valuing the business at close to £180 million.
At the same time, Livingbridge sold its stake in travel management company (TMC) Key Travel to private equity firm Elysian Capital in a deal which made the firm more than three times its’ £9 million investment five years ago.
And the UK’s largest homeworker travel agency business, Travel Counsellors, changed hands in yet another deal between private equity groups when Vitruvian Partners acquired the company from Equistone.
The Reed & Mackay takeover of Hillgate will propel the combined business into the UK TMC top-10 with a UK staff of about 600 and UK turnover approaching £500 million.
The merged business should handle more than one million corporate travel transactions a year in the UK alone. However, Reed & Mackay has expanded globally since its acquisition by private equity firm Inflexion in 2016 in a deal valuing the business at £170 million.
The company acquired Chicago-based Gray’s Travel Management for an undisclosed sum in January 2017.
It took a stake in German TMC Moll Travel, based in Frankfurt, in April last year and acquired French corporate travel firm Frequent Flyer Travel Paris last December.
Reed & Mackay also recently opened an office in Singapore to add to offices in the US and Dubai. It has TMC partners across Europe, India and the Americas.
The takeover of Key Travel, a specialist in the not-for-profit sector, follows a management buy-out of the firm backed by Livingbridge in 2013.
Key founder Ajay Sodha stood down as chairman of the company at the time, but he retained what he described as a “substantial” financial stake and acted as head of industry affairs for the company until May this year.
OTA Love Holidays has grown rapidly in the past six years to become the UK’s sixth-biggest retailer of package holidays, with a licence to carry 800,000 protected holidaymakers a year.
Investor Livingbridge also owns UK vacation rental business Sykes Cottages and successfully floated rival UK OTA On the Beach on the London Stock Exchange in 2015.
Travel Counsellors has up to 1,700 agents working under its banner and has been controlled by PE group Equistone Partners Europe since 2014.
The change of ownership will see Travel Counsellors’ founder David Speakman relinquish his remaining stake in the business.