On the Beach Group has acquired Classic Collection Holidays for £20 million.
Classic Collection reported EBITDA of £2.6 million and gross assets of £18 million, including property valued at some £2.5 million, in the year to October 2017.
As such, the board of On the Beach believes the acquisition will be earnings enhancing in the first full year of ownership, explained a statement.
Classic Collection dynamically packages luxury beach holidays and sells its packages through a network of third party offline travel agencies - including independent high street agents and homeworkers.
The company employs 124 staff in its Worthing headquarters, who will continue to manage the relationships with travel agents, ensuring an excellent level of service to those travel agents and the agents’ customers.
Classic Collection is currently owned by its managing director, Nick Munday, its directors and a number of small private shareholders.
Munday, managing firector of Classic Collection, commented: “I am thrilled to be joining forces with Simon and the team at On the Beach.
“Partnering with such an innovative market leader will give our loyal network of agents access to an even wider portfolio of mainstream beach holiday product through the launch of Classic Online together with further investment to broaden the luxury offering of Classic Collection.”
The acquisition represents a continuation of On the Beach’s strategy, while leveraging the group’s capabilities to access the circa five million short haul beach holidays that each year are booked offline.
The group plans to invest to grow Classic Collection’s portfolio of luxury holidays.
Simon Cooper, chief executive of On the Beach Group, commented: “We are pleased to welcome Nick and the Classic Collection team into the On the Beach family.
“We are excited about the opportunity to access the circa five million short haul beach customers that book holidays offline each year.
“Classic Collection has an excellent reputation in the industry and we look forward to working with Nick and the team to expand both of our product offerings.
The Package Travel Directive that came into effect in July has meant that travel agents that dynamically package holidays take on onerous responsibilities that make it increasingly difficult for independent agents to do so cost-effectively.
For agents, Classic Online will provide many of the benefits of dynamically packaging themselves, but without the risks, as it will be the package organiser.
Both Classic and On the Beach are package organisers so the group already has the infrastructure in place to fulfil these responsibilities.
The total consideration will made up of £14.6 million in cash on completion, £2.7 million cash which will be deferred for 12 months post completion, and £2.7 million in shares.