FLIGHT Centre Travel Group (FLT) today announced it has entered into a binding agreement to acquire 100% of United Kingdom-based luxury leisure travel business Luxury Travel Holdings Limited (Scott Dunn) for an enterprise value of £121 million (A$211 million (Acquisition), representing 9.6x Scott Dunn’s EBITDA for the 12 months ending 30 June 2023.
For Flight Centre, for the 12 months ending 30 June 20236, the Transaction is expected to be mid-teens percentage EPS accretive pro-forma for a full year of ownership prior to the realisation of synergies and the impact of one-off transaction cost. The Acquisition is anticipated to generate modest net corporate cost and supplier synergies.
The Acquisition will be funded via a fully underwritten A$180 million institutional placement (Placement) and A$40 million of existing cash on FLT’s balance sheet (together with the Acquisition, the Transaction), prior to receipt of any funds raised under the share purchase plan. Eligible shareholders will be offered the ability to participate in a non-underwritten share purchase plan to raise up to a further A$40 million (SPP, together with the Placement, the Offer).
As at 31 December 2022, adjusted to include the impact of the Acquisition, Flight Centre is expected to have pro-forma net cash of A$453 million excluding convertible bonds (which have a face value of A$800 million) and total cash and investments of A$1,113 million. As previously disclosed, certain covenants under Flight Centre’s existing bank facilities are expected to re-commence on 30 June 2023. Flight Centre expects to comply with all covenants by that date.
Completion of the Acquisition is not subject to any conditions and is expected to take place prior to the end of February.
About Scott Dunn
Scott Dunn is a multi-award winning, guest centric brand specialising in tailor-made, luxury holiday packages. Scott Dunn is a high margin leisure business in the resilient luxury travel segment with large average booking values and a strong level of repeat bookings.
Scott Dunn is recognised as a premium brand in luxury travel, including as winner of the Conde Nast Traveller Readers’ Choice Award every year since 2013. It is a consultant-led business with more than 200 full-time equivalent employees providing high levels of personal service and destination expertise.
Scott Dunn’s two main established markets are the UK and the US (representing 74% and 21% of TTV for the 12 months to 31 October 2022, respectively) with a small presence in Asia (representing 5% of TTV for the 12 months to 31 October 2022).
In the 12 months ended 31 December 2022, Scott Dunn generated TTV of £112 million (A$199 million) and revenue of £29 million (A$51 million).
Scott Dunn’s existing management team has been retained and will continue to oversee the business under FLT’s ownership, ensuring a business-as-usual approach is maintained.
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