TA Associates has announced the completion of a €153 million leveraged buyout of Spain-based eDreams, one of the fastest growing online travel companies in Europe.The LBO provides for the purchase by TA and eDreams’ current management team of 100 percent of the shares of the company from shareholders, including DCM - Doll Capital Management, Apax Partners, Atlas Venture and 3i Group, among others.
Founded in 1999, eDreams focuses on offering the best selection and prices for flights, hotels and vacation packages to customers in Spain, Italy and France through the use of innovative search, packaging and booking engines via the Internet. eDreams is the number one online travel agency, in terms of market share, in Southern Europe. Over six million customers have purchased their hotels, flights and vacations packages with eDreams since inception. In 2006, eDreams sales are expected to exceed €300 million. The company is headquartered in Barcelona, Spain.
“We are pleased to make this significant investment in eDreams,” said Christian Grünwald, a Vice President at TA Associates, who will join the company’s board of directors. “In addition to its leading market position, eDreams has very strong financial performance, a superior platform that allows it to offer unique products and services and lower ticket prices than competitors, and a solid and experienced management team. We look forward to working closely with them to further build value in eDreams through organic growth and international expansion.”
“We are very pleased to team with an experienced growth private equity firm like TA Associates,” said Javier Perez-Tenessa, Co-founder and CEO of eDreams. “TA has a long history of successful investments in the consumer and business services sectors, and we will leverage this institutional knowledge as we continue to increase eDreams’ leadership in the Southern European market versus our most immediate competitors.”
Currently, 15 percent of travel bookings are made online in the Southern European market. This figure is expected to reach more than 30 percent by 2009. Given the sharp increase in penetration, the online travel markets in Spain and Italy are expected to grow strongly.
“The Southern European retail travel market is significantly underpenetrated in terms of online purchasing,” said Ajit Nedungadi, Director of TA Associates Ltd., who will also join eDreams’ board of directors. “eDreams will benefit as its target markets catch up with Northern Europe and the U.S. in the proportion of travel purchased online. We expect that the company will continue to gain market share and defend its leading position.”
“By completing the largest ever e-commerce LBO in Southern Europe, eDreams gains access to the resources of top-tier financial institutions in order to fuel both organic growth and acquisitions,” said James Hare, co-founder and Italy MD for eDreams.
TA Associates, which has more than 38 years of experience investing in profitable, growth companies, has been an active investor in the European markets with numerous investments, including Drive Assist UK Ltd., GlobeOp Financial Services, IntercontinentalExchange, ION Trading Group, Sophos Plc and Tempur-Pedic International. Other investments include AIM Management Group (AMVESCAP), Biogen, Datek Online Holdings (Ameritrade Holding Corporation), Federal Express, Finisar Corporation and McAfee Associates. The firm opened its London office in 2003 and is continuing to expand its investment efforts in Europe.