TUI Group has reached an agreement with private equity firm KKR to sell Travelopi for £325 million.

The deal values Travelopi at 14.4 times its 2016 underlying EBITA and 7.7 times its underlying EBITDA.

The sale of Travelopia was announced in May 2016 and marks another milestone in transforming TUI into an integrated tourism business focused on hotel and cruise brands.

The proceeds will be invested in expansion of the growth segments hotels and cruises.

Fritz Joussen, chief executive, TUI Group said: “The sale of Travelopia is the next strategic step in sharpening TUI’s profile.

“We consistently continue to focus on becoming a vertically integrated tourism business.

“Both the group and its shareholders benefit from the negotiated result.

“We have ambitious goals and want to take the TUI brand into new regions in the world in the coming years.

“A clear strategic direction supports this course.”

Travelopia was previously part of Specialist Group and comprises a portfolio of more than 50 specialist travel brands.

It had been managed as an independent unit since the merger of TUI and TUI Travel at the end of 2014.

Due to their differing business models and strategic focus, there is little vertical integration with the core tourism businesses, argues TUI.

The potential impact on profitability and the large amount of brands were the basis for the decision not to combine the portfolio under the TUI brand.