The deal will triple Lastminute's existing UK flights volume, creating a UK flight revenue stream of approximately 拢50m. The deal will be paid for with the issue of 14,538,011 new shares.
Allan Leighton, chairman of Lastminute, said: "This is Lastminute.com's first acquisition of scale in the UK. The travel volume and expertise Travelselect.com brings will further enhance the delivery of our key metrics as we continue to lead the business beyond operating profit at a country level."
The acquisition will have an immediate positive impact on earnings and cashflow. For the year to January 31 2002, Travelselect.com generated 拢3.3m of gross margin.
The 19-year-old Travelselect provides approximately 200,000 flights a year to business travellers and consumers. Sales are generated on- and off-line with a significant shift towards online sales during the past 12 months. Internet bookings generated exclusively online now account for some 80% of total transactions.
The deal will see Vimal Khosla, majority shareholder and CEO of Travelselect, join the Lastminute board as an executive director with effect from today.
Travelselect.com is now profitable and has grown sales by over 40% a year for the past three years. The latest unaudited management accounts for Travelselect, for the year to January 31 2002, show turnover of 拢38.2m, gross profit of 拢3.3m and a loss before tax and goodwill amortisation of 拢3.1m.
Travelselect.com has negotiated fares with some 85 major airlines around the world including British Airways, Virgin Atlantic, Lufthansa, KLM and Air France.
Travelselect's current UK operation comprises 87 full-time employees based in London.
In addition to the initial consideration, Lastminute will pay further consideration depending on the Ebitda achieved for the year to January 31 2003. The additional consideration has been capped to a maximum payment of 拢3m and may be satisfied either in new shares or in loan notes, at the option of Lastminute.
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