Flight Centre Limited has increased its United States presence by acquiring a minority holding in a leading corporate travel management group.
In a deal that has given the company a US east coast footing, Flight Centre Limited has acquired a 25% stake in Boston-based Garber Travel Services Inc, a profitable family owned business established in 1946.
Garber generated about $AUD350million in total transaction value in 2006 from its network of more than 20 offices in Massachusetts, California, Rhode Island, Illinois, Vermont, Virginia, New Hampshire, Toronto (Canada) and London (UK).
The business will become part of Flight Centre Limited’s FCm Travel Solutions global corporate travel and expense management network, which now extends to more than 50 countries.
FCm Travel Solutions’ global executive general manager, Anthony Grigson, said the relationship with Garber would give the network solid east and west coast presences in the United States.
“Through this relationship and FCm?s existing businesses in Chicago and Los Angeles, we will have greater ability to service US and international clients,” Mr Grigson said.
“Garber’s management team will continue to run the business and will work closely with FCm?s North American leadership team to secure business and expand the FCm brand.”
Roz Garber, Garber’s president and CEO, said the company was looking forward to the new business opportunities that would come from being part of the global FCm network.
“We have had our sights set on taking our business to the next level by partnering with a global travel management company,” Mrs Garber said. “We’re very excited about joining forces with FCm because of the worldwide reach it gives us, and the close alignment in our business systems, service style and development of our people.”
Flight Centre Limited has also secured first right of refusal should Garber?s owners choose to sell additional shares in the business in the future.
The acquisition will not have a material impact on Flight Centre Limited?s earnings and was executed in line with the company’s traditional transaction multiples.