NEWS TRAVEL WEEKLY BUSINESS CONTINUED FROM THE BACK
too much cost and I think the process is engineered. But having had that challenge, I would say it’s what you are able to take out of it. “There are key points where
we needed the lawyers, but in terms of costs, fees and time spent, it is mushrooming. I think it is overengineered.” Roger Flynn, who until May
was chairman of fast-growing online travel agent Love Holidays before it was bought out by private equity firm Livingbridge for £180 million, said: “You write off costs versus benefits because you don’t want any shocks and surprises along the way and you want enough competitive tension in the process to make sure you get the best price. “If that makes the difference
between £170 million and £180 million, then it [use of advisers] will pay for itself. “Getting due diligence done
early so you understand all the things that could come along and be bumps in the road pays itself off later because you know what’s coming. The costs scale down with size. “[Employing advisers] allows
you to present the business in the best possible light, creates competitive tension and pushes the price up a lot.” Nicki Boyd, partner at Apiary
Capital, a new investor which made its first investment earlier this year in The Appointment Group, a corporate travel management firm, said all advisers play a vital role. She said the process of selling
a business had in some ways become more efficient due to the focus on making sure the right data was available. “Our job is to put all that
together,” Boyd said. “We have to assimilate that and then write the cheque. Chief executives are under enormous pressure.”
Travel Weekly Business Breakfast: The latest mergers and acquisitio
LDC: Neilson’s potential mirrors other investments
Neilson Active Holidays’ new investor sees growth potential similar to previous travel investments it has made.
LDC bought the Brighton-based ski and beach club specialist in August from Risk Capital Partners, which had owned it since 2013 when it bought it off Thomas Cook for £9.5 million. Richard Whitwell, head of
East Midlands at LDC, and who became a Neilson board member following the buyout, said: “We have known the management team for some time and we felt it was a high-quality business. “It was in a differentiated space,
and they had a good proposition and a good management team, and we were comfortable paying a market price. “In the last four to five years under Risk’s ownership, the team has done a good job transforming operations and did a very good job exiting Turkey. “Growth is centred around new sites. We saw the pipeline for the
‘Tough period set to follow Brexit, but it won’t last’
The Business Breakfast panellists predicted a tough period for the travel sector as a result of Brexit, but saidd it could be short-lived. Roger Flynn admitted he had
never known a period with such a lack of clarity for business, but he said: “In the end, a deal will be done. “If you have no deal, Ireland, Belgium and Holland will fall into recession, so for the EU it’s as much a problem for them.
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travelweekly.co.uk 8 November 2018 WHITWELL: ‘We were comfortable paying a market price for Neilson’
“Neilson was in a differentiated space and it had a good management team”
next couple of years and it was analogous with other businesses we have invested in, such as Forest Holidays.” Whitwell described the process of buying Neilson as “very
“But the risk of a weak deal has
gone up significantly. It’s painful not knowing what’s going to happen after March when you are selling a year in advance. “We had a currency shock after
the referendum. Prices peaked and that caused a two-month drop in conversion. But it all came back as people got used to working out how to afford their holiday.” Richard Whitwell, head of
East Midlands at LDC, said: “Any consumer-facing business has to look at Brexit. There may be bumps in the road. It might be Brexit-related but we have not panicked about what’s going on.
professional” and said reports that the deal could have failed at the eleventh hour “did not come from us”. “In truth, anything could cause something to fall apart but it would have to be something pretty fundamental by that point – a week before [the deal]. We were into the legal details at that point.” LDC’s other travel investments include Iglu, Away Resorts and Blue Bay Travel.
LINEY: Predicts tough times between now and March
If we had, we would not invest.” Peter Liney, chief executive of
Great Rail Journeys, said: “It’s going to be pretty tough between now and March.”
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