TUI Group has reached an agreement with UK investor Cinven Capital Management and Canada Pension Plan Investment Board to sell Hotelbeds Group for around €1.2bn. The transaction, which is subject to the relevant regulatory approvals, is expected to complete by end of September 2016.
Fritz Joussen, CEO TUI Group, commented: “This is a very successful transaction – a good deal for the future of Hotelbeds and for TUI Group shareholders as well as our continued growth in our core Tourism business. With the disposal of Hotelbeds, we consistently implement our strategy and strengthen our alignment as the world’s number one tourism group. There were numerous bidders for Hotelbeds Group. Following intensive negotiations, we decided to sell Hotelbeds to Cinven Capital Management and Canada Pension Plan Investment Board.“
Following its transformation in the past few years, TUI Group has had a clear strategic agenda, covering the complete value chain from distribution via flight all the way to Group-owned hotels and cruise ships as well as destination services. The Group seeks to further strengthen this positioning. “We combine the economies of scale of a global player with the strengths of our local markets and companies and their customer focus. We will use the disposal proceeds to continue our growth path, in particular in terms of content, and strengthen our balance sheet,” said Joussen.
Hotelbeds Group is the number one bedbank worldwide, offering hotel capacity to travel agencies and tour operators in more than 120 countries. As Hotelbeds Group is based on a different business model and strategy, it has been managed as a separate company outside TUI Group’s core Tourism business.
Commenting on the transaction, Jorge Quemada, partner at Cinven, said: “Hotelbeds Group is a strongly performing business with the largest accommodation distribution network within the overall B2B bedbank market offering broad client reach globally. We believe there are considerable growth opportunities through further investment in IT – as we did successfully with another global business based in Spain, Amadeus; growth in Asia and other markets – supported by our Hong Kong-based portfolio team; and market consolidation as the wholesale accommodation market remains highly fragmented.”
Shane Feeney, managing director, head of direct private equity, CPPIB, added: “Hotelbeds is a unique opportunity to invest in the leading operator within the hotel accommodation distribution market, an industry which has strong long-term prospects that will support continued growth. Backing a best-in-class management team, with an exceptional track record of organic growth that we will support in driving industry consolidation in the coming years, provides a terrific opportunity for CPPIB.”
