Helloworld shareholders have given the go-ahead for the acquisition of Express Travel Group (ETG).
The purchase, worth $70 million, will be made in two parts. The first comprises a cash payment of $40 million and $10 million in new Helloworld shares. The second tranche includes a cash payment of $15 million and the issuance of HLO shares worth $5 million.
With 99.75 per cent of votes in favour of the move, Helloworld will acquire all of ETG brands including Express Tickets, Independent Travel Group, Select Travel Group, Alatus, italk travel & cruise, Creative Cruising AU/NZ and First Travel Group, YOU Travel Group and Lifestyle Holidays in New Zealand.
ETG currently employs over 100 personnel, with a national support network and offices in Melbourne, Sydney and Auckland.
“The proposed acquisition of Express Travel Group represents a strong strategic opportunity for Helloworld shareholders and is expected to be earnings accretive in FY24,” Helloworld CEO Andrew Burnes said.
“The acquisition will make both businesses more competitive in a changing travel industry and enhance the service capability of Helloworld and ETG, providing benefits to agents, suppliers and consumers.
“The existing management personnel, including CEO Tom Manwaring, will remain with ETG as part of the wider Helloworld group and continue to support their agent networks and customers.
“The ETG business has been one of the most successful travel operations in Australia and New Zealand in the ticketing, retail network and distribution sectors, which will continue to grow under Tom’s leadership.”
More value
In a presentation at HLO’s annual general meeting (AGM), chairman Garry Hounsell said Helloworld Directors believe the Proposed Transaction will create “materially more value for Helloworld Shareholders”.
He also noted Helloworld Directors looked favourably upon a number of factors, including:
- Proposed Transaction presents an opportunity for expansion of the existing HLO retail network in Australia and New Zealand
- Proposed Transaction recognises that the ticket consolidation business of ETG and HLO together will enable a competitively stronger business
- Proposed Transaction represents an attractive financial impact; earnings accretion expected from FY24, a reasonable multiplier of 7 times forecast earnings from FY23
- Proposed Transaction enables strong synergies through use of Helloworld’s Smart Ticket solutions, enabling ETG agents to engage with best in market solutions while continuing to work with the ETG team
HLO announced it would purchase ETG in Australia and New Zealand in June.
