Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessEconomy

Thomas Cook India acquires Kuoni's destination management network for Rs 125 crore

The price of the deal is Rs 125 crore and the valuation is about 5 times profit before tax and has been funded entirely from Thomas Cook’s internal accruals.

June 29, 2017 / 08:52 PM IST
Tourists ride in an open-air double-decker bus past the Arc de Triomphe in Paris, France, May 30, 2017. REUTERS/Charles Platiau - RTX38942

Tourists ride in an open-air double-decker bus past the Arc de Triomphe in Paris, France, May 30, 2017. REUTERS/Charles Platiau - RTX38942

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Travel services provider Thomas Cook India Group has finalised the acquisition of a significant part of Switzerland-based Kuoni's global destination management specialists. The acquisition is seen as a part of its growth strategy with growth in Indians outbound travel plans.

Destination Management Specialists are local experts with offices in the holiday destinations themselves.

The price of the deal is Rs 125 crore and the valuation is about 5 times profit before tax and has been funded entirely from Thomas Cook’s internal accruals, according to a person aware of the development.

“With this acquisition, we effectively go from being an entirely India-focused business with a business in Hong Kong to a leading Asian travel business with footprint across 22 countries -- from Australia, South east Asia, China, south and Eastern Africa, middle east and north American continent,” Madhavan Menon, Chairman and Managing Director Thomas Cook India Group told Moneycontrol.

Prior to this acquisition, the group had a network spanning four countries — India, Sri Lanka, Mauritius and Hong Kong.

“Majority revenues will still come from India but we are diversifying more. All the acquisitions bring European and American tourists and represent a higher margin for us,” Menon said.

He added that holidays are becoming an integral part of people’s life and more middle-class people are doing a combination of domestic and international travel.

“Indian people are taking at least one international trip every year… We are also seeing average spends on travel by Indians is increasing. The value per transaction has increased from Rs 1.20 lakh,” Menon said.

Post this acquisition, Thomas Cook now has 6,500 employees and the business will bring in additional revenues of Rs 1,000 crore and enhance the bottom-line by nearly Rs 30 crore, Menon said.

The Group’s revenues will now be approximately Rs 8,700 crore, of which Rs 4,000 crore comes from the travel business.

In FY17, in the outbound market, traditional markets have grown in Australia, South East Asia, Europe and America.

Passengers have increased by 14 percent and movement of tourists going to Australia and Asia have increased, Menon said adding that for the group this year, growth should be in the range of 12-14 percent.

Further, Thomas Cook has seen a 26 percent rise in its bookings online and 40 percent growth in passenger booking through holiday packages seen through tie-up with banks.

The travel firm has three verticals — foreign exchange which is India-focused, tour operating which is with SOTC and a Hong Kong partner and hospitality services such as visa, passport and insurance.

Beena Parmar
first published: Jun 29, 2017 08:50 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347