10/05/2018 - 13:30

Helloworld takes $3m stake in Perth travel firm

10/05/2018 - 13:30

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ASX-listed travel company Helloworld has taken a majority stake in Asia Escape Holidays, four years after a backdoor listing plan by Asia Escape and two other Perth travel agencies fell through.

Asia Escape Holidays offers packages throughout Asia, including Bali.

ASX-listed travel company Helloworld has taken a majority stake in Asia Escape Holidays, four years after a backdoor listing plan by Asia Escape and two other Perth travel agencies fell through.

Under the new deal, Helloworld will acquire 60 per cent of the Asia-focused travel group for $2.8 million, with the option to move to full ownership in four years.

The acquisition represents an earnings multiple of six times, based on the 2018 financial year figures.

Asia Escape is a wholesale travel company with about 45 employees.

Helloworld chief executive Andrew Burnes said the deal made strategic sense.

Asia Escape Holidays is an excellent strategic fit to Helloworld Travel’s existing wholesale businesses and provides the group with a trade focused brand that has the expertise and speed to market to compete in the growing package and impulse buying market for travel throughout the Asia Pacific region,” he said.

Helloworld said the acquisition complements its existing wholesale range and increase its mid-haul all-inclusive package range.

“Increasing demand for all-inclusive packages in retail leisure markets is increasing and Asia Escape Holidays has considerable expertise in creating and delivering these packages throughout the region,” the company said in a statement to the ASX.

Asia Escape will continue to be run by managing director Mason Adams, who will retain the remaining 40 per cent of the company and become part of Helloworld’s senior management team.

“This investment is a significant milestone for Asia Escapes and being a part of the Helloworld Travel Group will provide the business with fantastic opportunities to continue to build our business,” Mr Adams said.

The transaction is expected to be completed by the end of the month.

It comes four years after ASX-listed Red Gum Resources (now MCS Services) announced it was acquiring three Perth travel agencies - Asia Escape, Holiday Planet and Motive Travel.

The deal constituted a backdoor listing by the travel groups but was cancelled in February 2015.

Shares in Helloworld were off 0.44 per cent at $4.50 each at 3pm AEDT.

 

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