JacTravel hopes to more than double its turnover to £330 million by 2017 following its acquisition by private equity group Vitruvian Partners.
The B2B wholesaler and inbound operator has been sold for around £80 million by venture capital firm Bowmark Capital, which has owned it since 2007, to further its growth into new global markets and increase investment into its technology infrastructure. It is Vitruvian’s first travel investment.
JacTravel chief executive Terry Williamson said the company had “outgrown” its current ownership and needed a new owner “with access to bigger finances” in order to continue its planned expansion plan into new markets, including China.
Growth could involve mergers or acquisitions of wholesalers, he added. Up to now growth has been organic.
“Our plan is to more than double turnover from £150 million to £330 million by 2017. We are looking at potential acquisitions and mergers. It sometimes is easier to expand that way,” he said.
JacTravel sells city hotel accommodation through the trade, including travel agents, tour operators, airlines and online travel agencies.
He said: “We want to enter countries such as China in the next three to four years and to do that we needed a completely different partner. We are not in China at all and we have a plan to enter it, which will need local office set ups, local people and infrastructure. There is also a fund available for us to look at investing in new markets if we wanted to buy a wholesaler.”
The cost of setting up in China would be in the region of £300,000-£400,000.
The company also wants to grow its presence in the US, Australian and Russian markets. It started to sell through the US market 18 months ago but does not yet have a significant customer base. It has just signed its first big customer in Australia. Similarly, the company has relatively few clients in Russia.
It hopes to have 20,000 hotels on its books by 2017, up from the current 12,500.
Already JacTravel’s customer base has shifted. In 2009, 90% of its customers were based in Europe. Now 60% of customers are in Europe, including the UK, and 40% are outside the Eurozone. Over the past three years, it has moved into Latin America, the Middle East and Asia.
The new ownership will also mean further investment in technology to improve booking speed and functionality online and improvements in the way suppliers connect to its systems.
The travel agency portal will be redesigned and upgraded, with a new booking platform for travel agencies rolled out within two months, while other improvements will include adding the ability to book through more currencies in more languages.
The change in ownership does not involve any changes in the company’s staff. It employs 220 people, up from 130 in 2009, and is recruiting for a further 25 roles this year.