CORPORATE TRAVEL MANAGEMENT TAKES OVER INTERNATIONAL RIVAL
Written on the 20 November 2013
CORPORATE Travel Management (ASX:CTD) has bought 75.1 per cent of Hong Kong travel company Westminster.
The purchase cost $49.2 million, which the Brisbane-based company will raise through a capital raising offer underwritten by Morgans.
Managing director and founder, Jamie Pherous (pictured), will be a significant participant in the offer, but is not in a position to take up his full entitlement.
Westminster Travel is Asia’s leading travel management company, operating in Hong Kong, Singapore, China, Macau and Taiwan for 40 years.
Two of the company’s major shareholders will acquire the remaining 24.9 per cent.
Speaking with Brisbane Business News today, Pherous explains that CTM has been working closely with Westminster for two years, collaborating on networking clients and joint tenders together, before the strategic acquisition.
“Some agencies who move into Asia have huge issues integrating culture, but we’re proudly keeping the existing Westminster management team because we’ve been working with them for two years,” Pherous says.
“When I’m with their senior management team it’s like I’m sitting with my own.
“They’re clearly the best in their region. Because they’ve got a lot of western education they have a great mix of understanding western business and regional culture.”
The company is forecasting underlying EBITDA (earnings before interest, taxation, depreciation and amortization) of $28 million including the five month contribution from the share in Westminster.
“We’re focused on how we get the business to grow, and secondly to share best practice and look after that management team,” he says.
“The experience of that team is so excellent and they’re doing a great job.
“The next six months will simply be looking after that team, and in the short term there will be no movement of staff. Long term we will be looking at having Westminster and CTM staff collaborating and sharing ideas.
“Our point of difference was to be a global travel management company. We've now got a terribly compelling case for clients who need an Asia solution. It’s the sort of tenders and business we can now win together that will be exciting.
“It’s going to be a different company in FY15.”