TUI sells Hotelbeds business for $1.3 billion
By Victoria Bryan and Freya Berry
BERLIN/LONDON (Reuters) - European tourism group TUI (TUIT.L: Quote) is selling its Hotelbeds unit to private equity group Cinven [CINV.UL] and Canada Pension Plan Investment Board (CPPIB) in a deal worth 1.165 billion euros ($1.32 billion), the companies said on Thursday.
TUI put its Hotelbeds unit, which sells hotels rooms to wholesale customers such as travel agencies and tour operators, up for sale because it did not fit with its other tour operating, cruise and hotel businesses.
Hotelbeds is the largest business globally of its kind with a market share of six percent. Headquartered in Palma de Mallorca, it reported turnover of 1.06 billion euros and underlying EBITA of 69 million in the year to end September 2015.
Cinven and CPPIB will back the existing management team and share governance of the business equally, said Shane Feeney, Head of Direct Private Equity at CPPIB, adding that he expected to use Hotelbeds as a platform for future purchases.
"We will be opportunistic with acquisitions," Feeney told Reuters.
The sale comes two months after private equity firm EQT took Swiss travel firm Kuoni private for 1.35 billion Swiss francs ($1.39 billion).
Sources familiar with the process had previously said that EQT was interested in buying Hotelbeds to go with its Kuoni purchase.
The proceeds will be used to invest in further growth and strengthen TUI's balance sheet, TUI said, adding the transaction is expected to complete by the end of September. Continued...