Corporate Travel Management (CTM, ASX: CTD) has expanded its global footprint, announcing today the acquisitions of Chambers Travel in Europe and Diplomat Travel in the USA for a combined $52.6 million.
The acquisitions of multi-award-winning travel management company Chambers Travel and respected Diplomat Travel are in line with CTM’s strategic plan to establish a strong base in the UK and European markets and continue to expand in North America.
The acquisitions are expected to be earnings per share accretive in FY2015 and will be funded by a fully underwritten Entitlement Offer of fully paid ordinary shares to eligible shareholders at $8.80 led by Morgans Corporate Limited.
The acquisitions are targeted to take effect from January 2, 2015 and will contribute approximately $4 million earnings before interest, tax, depreciation and amortisation (EBITDA) over six months trading to CTM’s 2015 annual results.
CTM Managing Director, Jamie Pherous, said the Board expected the Company’s 2015 EBITDA guidance to be above $45 million based on the new acquisitions plus CTM Group’s initial guidance of more than $41 million, to be refined after the 2015 half year results.
He said growth would be in line with CTM’s proven business strategy focussing on personalised service, tailored technology solutions and a commitment to delivering a return on investment.
Chambers Travel is a multi-award-winning travel management company headquartered in London, with operations in England, Scotland, France, Germany, The Netherlands, Switzerland, Sweden and the Czech Republic.
It establishes an immediate and mature scalable presence in eight countries in Europe for CTM, the last key region in the Company’s global strategy, making CTM even more competitive in the global/regional client segment, estimated at USD200 billion.
Chambers Travel services clients in ten European languages, giving CTM an additional competitive advantage.
Chambers Travel and CTM have successfully worked together on winning and servicing clients for over a decade and 60% of CT’s clients are global clients. It won Best Agency in the UK in 2013 and 2014, and is a finalist in 2015.
Diplomat Travel is a travel management company headquartered in Washington DC, USA. Its acquisition expands CTM’s USA coverage to the East Coast. CTM will now cover all major time zones in the USA and operate out of 18 cities across eight states.
“As a result of these acquisitions, CTM will now operate in 46 cities, across 23 countries, on four continents; employing over 1,800 staff worldwide,’’ Mr Pherous said.
“Both acquisitions meet our strict acquisition criteria. They possess capable and passionate management teams, are leaders in corporate travel in their respective regions, enjoy high client and staff retention, and will have significant ownership in CTM via CTD stock.
“We are delighted to have Chambers Travel become our anchor point in the UK and Europe to lead future growth in this region. This partnership culminates a decade of successfully working together allowing a seamless transition for our respective management teams.
“Chambers is a multi-award winning company with an excellent track record of winning and servicing regional and global clients. Together with our well established businesses in the Asia Pacific and North America, we have a significantly improved our offering for regional and global clients, particularly for travel across the Atlantic.”
“Meanwhile, Diplomat Travel has a highly capable team with some of the finest expertise in the industry that we have ever seen. The Diplomat Travel team will provide an excellent East Coast base to deliver future growth,’’ he said.
CEO of Chambers Travel, Chris Thelen, said the company had watched CTM build a strong business over the years based on highly personalised service delivery with best-in-class technology solutions to deliver meaningful return on investment to clients.
“We share this same philosophy. As the new European regional headquarters for CTM, we are significantly enhancing our service offering to clients, while providing exciting new career opportunities for our employees,’’ Mr Thelen said.
Managing Director of Diplomat Travel, Denise Guida, said CTM had developed a unique culture of support and empowerment, and had a well-established sales team in North America.
“This has a significant benefit in allowing us to be more creative and responsive in our effort to provide our highly customized travel service to a greater client base into the future,’’ Ms Guida said.
About CTM: CTM is an award-winning provider of innovative and cost effective travel management solutions to the corporate market. Its proven business strategy combines personalised service excellence with client facing technology solutions to deliver a return on investment to clients. Headquartered in Australia, the company employs over 1800 FTE staff globally and operates out of 46 cities in 23 countries across Australia, New Zealand, Asia, North America and Europe.
About Chambers Travel: Chambers Travel (CT) is an award winning, 26 year old travel management company headquartered in London with approximately 210 employees. CT has offices in eight European countries including England, Scotland, France, Germany, Switzerland, The Netherlands, Sweden and the Czech Republic. CT’s client mix approximately 95% Corporate, and 5% MICE and leisure. CT has expected sales volume for the year ended 31 March 2015 of approximately GBP135m.
About Diplomat Travel: Diplomat Travel (DT) is a 52 year old leading travel management company located in the Washington DC/Virginia area servicing corporate clients in the North East USA.With an expected sales volume of approximately USD45m for the year, DT’s client mix is over 90% corporate.