Travelzest makes £3.95 mn acquisition

Travelzest is acquiring UK based Fair’s Fare for £3.95 million as part of its drive to build up its portfolio of high quality, niche travel companies

Audited results of Fair’s Fare Limited for the year ending 31 December 2005 show a total
transaction value of £16,136,439 which represents turnover of £2,019,889. After adjustment for
overhead costs relating to the previous owner and other non recurring costs, which cease upon
acquisition by Travelzest, the operating profit is £524,794. 

The acquisition will be satisfied by £1,250,000 cash, £2,000,000 loan notes and 542,636 shares on completion, subject to the net asset value of Fair’s Fare at completion. 

The initial purchase consideration is based on a multiple of five times the forecast EBIT for 2006
of £800,000, with a clawback mechanism should the results fall short of this target.  In addition,
there is an opportunity for the vendor to earn a further £3.5 million if the business achieves
certain profit targets in 2007, which will be satisfied solely by shares in Travelzest.

Travelzest also announces a placing of 2,085,714 new shares with investors at a price of 126
pence per share.  The number of shares in issue following the placing and the issue of the vendor
consideration shares will be 11,464,435.  These shares are expected to be admitted to trading on
15 June 2006.


Commenting on the acquisition, Chris Mottershead, Travelzest’s Chief Executive, said: “Travelzest is making excellent progress in building a portfolio of high quality, niche travel companies.  Fair’s Fare is a growing business offering a leading service to frequent first and
business class travellers.  As part of the Travelzest Group it will benefit from opportunities
provided by other Group companies, together with exposure to new external customers.  This
acquisition follows closely on the heels of Peng Travel and we continue to assess potential