Emirates Group-owned dnata has signed an agreement to acquire Stella Travel Services which includes the brands Travel 2, The Global Travel Group, Travelbag, Sunmaster and Triton Rooms.
The deal comes just seven months after the travel services division of the Dubai-based firm purchased Travel 2 rival Gold Medal from Thomas Cook for £45 million.
Dnata previously bought leading UK online travel agent Travel Republic at the end of 2011 for an undisclosed sum and is thought to have more UK acquisitions in its sights.
It is not known how much dnata is paying for Stella Travel Services but Stella today said its new ownership would bring the investment that it requires for its five individual brands, which cover high street and online retailing, tour operators and wholesales supply, to “realise their next phase of development and growth”.
Since 2008, Stella Travel Services has been owned by funds managed and advised by CVC Capital Partners and UBS AG. Under the new proposed structure, Stella Travel Services will become part of the international travel business of dnata.
Iain Andrew, divisional senior vice president of dnata’s travel business, said: “The addition of Stella Travel Services to the dnata portfolio enhances our offering to customers and the travel trade, strengthening our position as a global company.
“The combined strength of Stella Travel Services, its brands and our group will deliver considerable benefits for our customers and suppliers.”
“Dnata’s travel business has plans for extensive growth, and the acquisition of Stella Travel Services is an important part of those plans. We look forward to the future opportunities that this agreement brings.”
Andrew Botterill, Stella Travel Services chief executive, said:“Our businesses are highly attractive to dnata and I’m excited that the success story of Stella Travel Services will continue. Our acquisition by dnata is a major step forward in our plans to increase market share.”
Stella claims that since 2008 under private equity ownership it has taken the group from a loss of £17.3 million to a profit this year of £6.6 million.
It has been rumoured for some time that CVC Capital was looking to exit the UK market with dnata tipped as a potential trade buyer.
But in May, when asked about it, Iain Andrew told Travel Weekly: “There is a lot of overlap with Gold Medal.
“We are very happy with Gold Medal and if someone else has it [Travel 2] we are very happy to compete against them. We have a bit of a war chest to invest in Gold Medal. Good competition keeps you on your toes.”
It is not known how dnata plans to operate the two leading long-haul, trade-only brands in the UK going forward. The sale is subject to regulatory approval, and both businesses will operate independently pending the outcome.
As well as Gold Medal and Travel Republic dnata holds a major stake in travel management company HRG and has leisure travel brands in the Gulf.
Stella Travel Services UK comprises Travel2, Travelbag, agency franchise group Global Travel Group, agency consortium Independent Options, and online agents Sunmaster, Globallatedeals, MyHolidayAdvisor and Holiday Collection.
Dnata is part of the Emirates Group – which includes airline Emirates – and is owned by the Dubai government’s Investment Corporation of Dubai. The group has 80 subsidiaries operating in almost 40 countries.
It has ground-handling operations at Heathrow, Gatwick, Manchester, Birmingham, East Midlands, Glasgow and Newcastle airports, as well as at Zurich, Geneva, Singapore, Sydney, Melbourne and another 15 airports. The company also owns cargo-handling, airline catering and IT operations.
Dnata’s travel services recorded growth of 22% in 2013-14 and a revenue of AED 662 million ($180 million).
Parent Emirates Group reported an annual profit of AED 4.1 billion ($1.1 billion), of which dnata contributed AED 829 million. Dnata’s annual revenue was reported as 14% up year on year to AED7.6 billion ($2.1 billion).
The dnata name originated as an acronym for the Dubai National Air Travel Agency. The company employs more than 23,000 people.
Andrew told Travel Weekly in May: “People who think we are a moneybags find out very quickly that’s not the case. We buy what’s right for us for a fair price.”