lastminute.com plc has announced the purchase of The Destination
Holdings Group Limited (DGL), a leading online travel provider of
flights, own label package holidays and car hire for å£12.0 million.

The consideration will be satisfied by a vendor placing to raise £8.0
million and the issue of 4,835,298 new shares in lastminute.com plc.

Highlights of the transaction:

* significantly earnings enhancing in the first full year after
  acquisition

* immediate positive contribution to operating cashflow. At 30 April
  2002 DGL`s net cash and investments amounted to £8.2 million

* creates the opportunity for further cost synergies supplementing
  the recent Travelselect acquisition and growth in gross margins

* strengthens the lastminute.com product portfolio by providing
  tailor-made holiday solutions for clients for both long-haul

  destinations and city breaks

* cements the relationships with key airline and hotel suppliers.

DGL has over 16 years experience in providing travel solutions for
  clients. Sales are generated both on and off-line. The proportion
  of bookings now generated online is approximately 75% of total
  bookings. The Group trades under the travel4less brand online, with
  twenty four individually branded sites for each travel product or
  destination.

DGL has seen sales grow from £8.1 million in the year to 30 April
  1995 to £28.3 million in the year to 30 April 2001. The
  latest unaudited management accounts for DGL for the year to 30
  April 2002 show revenues of £38.8 million generating a gross margin
  in excess of 15% and a profit before taxation of £1.4 million on
  the same basis. Unaudited net assets at 30 April 2002 amounted to
  £0.5 million (2001 audited: £0.4 million), including net cash and
  investments of £8.2 million. DGL currently employs 119 full time
  staff based in London.

Raj Kumar, the joint majority shareholder and Group Managing
  Director of DGL will join the Executive Committee of lastminute.com
  with effect from completion.

 
In addition to the initial consideration, lastminute.com
will pay a
  maximum deferred amount of £3 million, dependent upon the results
  of DGL for the year ending 30 April 2003. The deferred
  consideration may be satisfied either in new shares or cash, at the
  option of lastminute.com.

 
The 4,835,298 new shares in lastminute.com plc to be issued as
  initial consideration are subject to lock-up provisions for 12
  months from completion.

 
lastminute.com continues to trade in line with expectations for the
  seasonally stronger second half of the financial year. The Group
  remains confident of continuing business growth and moving further
  towards overall Group profitability and positive operating
  cashflow.

 
lastminute.com plc proposes to raise £8.0 million, after expenses,
  by way of a vendor placing of 9,638,555 new lastminute.com plc
  shares priced at £0.83 per share. The new shares will rank pari
  passu in all respects with the existing shares.

 
Allan Leighton, Chairman of lastminute.com said:

  “The acquisition of The Destination Group provides access to
  excellent and exclusive high margin product, ideally suited to the
  lastminute.com customer base.”
Brent Hoberman
, Chief Executive of lastminute.com said:

  “Raj Kumar and his team have built a great business operating
  principally in the online travel sector. I am delighted to welcome
  them to the lastminute.com group and to acquire such an earnings
  enhancing company which furthers the scale of the UK business.”

  Raj Kumar, Group Managing Director of The Destination Group Limited
  said:

  “To become part of such a dynamic and forward thinking Group is
  tremendously exciting and offers us the economies of scale and
  global distribution we need to grow the business dramatically and
  strengthen both brands in an increasingly competitive marketplace.
  The move towards dynamic packaging will ensure that we become the
  integrated online tour operator of choice for the discerning
  client.”

 
Related stories on ITN:

(10/06/2002) lastminute.com Announces Partnership with German Online Travel Agency

(05/06/2002) Priceline.com Launches Name Your Own Price on LastMinuteTravel

(10/05/2002) lastminute.com announces strong Quarter 2 results.

——-