Luxury operator Scott Dunn is being taken over by Flight Centre Travel Group for more than £120 million.
The deal was confirmed overnight by the Australian travel agency group and is expected to be completed before the end of February.
In an announcement to the Australian Securities Exchange, Flight Centre Travel (FLT) said the acquisition for the UK specialist in tailor-made luxury holidays was being funded by raising equity.
The statement said the transaction was worth an “enterprise value” of £121 million (A$211 million).
Scott Dunn will continue to operate as an independent unit with corporate support provided by Flight Centre.
The focus will be on consolidating growth in the UK and accelerating expansion in the US.
Flight Centre added: “Scott Dunn provides an entry point into the UK and US luxury travel market through a well-regarded, scalable brand which will be supported by FLT’s global platform.
“Flight Centre believes there is significant headroom for further growth in the UK market.
“Continued expansion into the larger US market is a key growth strategy built on the initiatives that have already delivered growth in the UK.
“Further growth in the US is likely to be supported why Scott Dunn’s strong product offering and the ongoing shift towards luxury ‘private’ travel.”
This is defined as offering parties of individuals the flexibility to personalise itineraries against traditional group travel involving independent parties with a set departure date and itinerary.
Flight Centre pledged to retain Scott Dunn’s “highly experienced” management team led by chief executive Sonia Davies.
Scott Dunn was founded by Andrew Dunn in 1986, initially as a ski specialist.
Dunn set up the company immediately after leaving university at the age of 22.
In 2014, private equity firm Inflexion took a majority stake in the luxury operator. The deal for an undisclosed sum had been speculated to be worth up to £70 million at the time.
Scott Dunn has offices in London, Singapore and San Diego with more than 200 staff.
As well as creating tailor-made itineraries, Scott Dunn operates fully-serviced villas in the Mediterranean, ski chalets in the Alps, Explorers kids clubs, safaris, touring and expedition cruising.
In an overview into the transaction, the Australian company said Scott Dunn achieves higher revenue and earnings [ebitda] than Flight Centre’s existing leisure operations.
Scott Dunn reported total transaction value of £112 million and revenue of £29 million in 2022 as it achieved strong recovery post-Covid.
Flight Centre described Scott Dunn as a “culturally aligned organisation with strong management committed to continuing growth plans”.
The business operated in a high margin segment with “resilient characteristics” on the back of high value and growing loyalty among customers.
Scott Dunn is seen as a “scalable brand” with capabilities “to accelerate growth utilising the Flight Centre platform and infrastructure”.
The combination with Flight Centre is expected to delivery “attractive financial outcomes”.
Flight Centre added that it expected full year underlying earnings of between A$250 million-A$280 million prior to the benefits of the acquisition.