The Canada Pension Plan Investment Board and European private equity firm Cinven have announced an agreement to acquire Hotelbeds Group, a global provider of travel services based in Spain, from Tui Group.
The total enterprise value of the acquisition is €1.165 billion.
“Hotelbeds is a unique opportunity to invest in the leading operator within the hotel accommodation distribution market, an industry which has strong long-term prospects that will support continued growth,” said Shane Feeney, managing director, head of direct private equity at CPPIB.
“We believe there are considerable growth opportunities through further investment in IT – as we did successfully with another global business based in Spain, Amadeus; growth in Asia and other markets – supported by our Hong Kong-based portfolio team; and market consolidation as the wholesale accommodation market remains highly fragmented,” said Jorge Quemada, partner at Cinven.
In a news release, CPPIB and Cinven called the acquisition of Hotelbeds an attractive investment opportunity based a number of factors, including: strong financial performance with double-digit total transaction value growth in the bedbank business over the last five years; strong underlying market growth supported by an expected increase in global hotel bookings; and market consolidation opportunities in Europe, Middle East, Asia and the Americas given market fragmentation and potential for further margin improvement through economies of scale.
“The bedbank segment continues to grow fast and with the backing of Cinven and CPPIB we will be well placed to invest more strongly than ever in technology, innovation and distribution,” said Joan Vilà, chief executive officer of Hotelbeds Group. “We are excited about Cinven and CPPIB’s investment in Hotelbeds which will enable us to continue improving the quality and range of services we provide to customers as a financially solid, independent and scalable bedbank operator.”
The transaction is subject to customary approval from the relevant regulatory authorities.