G Adventures is poised to embark on a spate of acquisitions using a war chest from investment giant Certares, with its CEO describing the situation as “go-time.”
Bruce Poon Tip said his focus for the last couple of years had been the recovery of his core businesses, but he also struck a deal with billion dollar investment firm Certares during the pandemic.
But he said the agreement, which was signed in January 2021, has been one of the most “misunderstood and mis-reported”.
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Poon Tip stressed that Certares, which also has interests in American Express Global Business Travel, Hertz, AmaWaterways, Latam Airlines and Internova Travel Group, which owns Barrhead Travel, has not taken a stake in G Adventures by giving it working capital.
Instead, it has put up a $50 million US dollar fund for the small group touring and adventure specialist to make acquisitions – and said Certares was “hoping to deploy more capital in time”.
It’s a convertible deal where Certares will get equity in any acquisitions G Adventures makes.
Poon Tip explained: “Certares have approached me many times over the last 10 years, but I’ve never been interested in selling G Adventures. However, in the pandemic, I saw that there would be opportunities on the horizon to acquire companies, so I proposed a creative structure which would allow me to do that.
“Certares don’t have the capability to acquire small to medium sized companies, only very large ones, so they view us as a platform to do help with that,” he said, adding that any acquisitions would be of businesses “within the vision of G Adventures”.
He said that could be anything from other touring firms, distribution businesses or technology players.
Poon Tip said Certares had been “very patient”.
“They have been an amazing partner as we did the deal a while ago, and two years later, we still haven’t made an acquisition”, he said, blaming a combination of the pandemic going on longer than anyone first thought, and because so many more companies had “pulled through” than anyone had expected.
“I have been shocked at the lack of failures so far. We didn’t see anywhere near the depth of difficulties we thought,” he admitted.
But Poon Tip predicted that could change in the coming months as companies now face survival on their own, with support from Governments now withdrawn.
He hinted that its first acquisitions could be announced in the next 60 days, saying: “Now is go-time.”
And he added: “The first ones won’t be in the UK, but we have a bunch of others that are. We have certain areas which we’re keener to invest in and the UK and Europe are a high priority.”
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