CORPORATE TRAVEL SPLASH $8.5 MILLION ON ACQUISITION
Written on the 8 August 2011
CORPORATE Travel Management (ASX:CTD) has acquired Melbourne-based travel agency ETM Group for $8.5 million – which is the upgraded net profit figure for FY11.
The acquisition will be funded entirely from current CTM cash reserves and future cash flow. CTM has forecast total FY12 EBITDA growth of 30 to 40 per cent.
Managing director Jamie Pherous (pictured) says the company had been working on the prospect for more than a year. It follows the acquisition of Travelcorp.
“ETM Group will add significant depth to CTM’s corporate specific services, with its complementary MICE (Meeting, Incentive, Conference and Event Travel) and VIP Leisure offerings,” he says.
“It will also enable CTM to present a complete integrated corporate travel solution to its clients, with all these services under the one roof.”
Pherous says the strategic rationale behind the acquisition is that firstly, ETM Group will bolster CTM’s Melbourne corporate presence, deliver meaningful synergies and complete CTM’s national footprint for long-term sustainable corporate growth in Australia.
“Secondly, the high yielding MICE sector is worth over $2 billion annually in Australia and with the integration of ETM’s events division into CTM’s events travel management, CTM will be ideally positioned to leverage MICE solutions across CTM’s corporate clients,” he says.
“And thirdly, Like CTM, ETM Group has a renowned leisure team, specifically focused on delivering VIP leisure services to chief executives, directors, senior executive management and high net worth individuals, enhancing CTM’s established reach within this sector of the travel industry.”
Pherous says the corporate and leisure divisions of ETM Group will change name to CTM, effective from October 1.
“The MICE departments of ETM Group will retain their name and operate nationally with CTM’s existing division under the single brand of Event Travel Management,” he says.
“Together with ETM Group management, CTM’s management will work through a transition plan to maximise the combined opportunities and synergies leading up to October 1 2011.”
CTD shares remained steady this morning at $1.90.
Don’t miss the August edition of Brisbane Business News, featuring an in-depth interview with Pherous and his ambitious plans for CTM.