Australia’s listed Corporate Travel Management has continued its strategic expansion into the Asian market after acquiring a majority stake in Hong Kong-based Lotus Travel Group Limited (Lotus) in a deal worth AU$50 million (HK$300m).
The purchase of 75.1 per cent of Lotus will take effect from October 2, 2018 and will result in CTM becoming the largest travel management company in Hong Kong servicing Greater China, with a combined Total Transaction Value approaching AU$2.5 billion (HK$15bn).
CTM’s partners in Asia, Ever Prestige Investments Limited (EPI), will acquire the remaining 24.9 per cent through CTM Asia.
The acquisition creates optimum scale for the combined entity to leverage technology, support costs and supplier relationships across a wider base to best enhance long-term sustainable growth in the Asian region.
CTM Managing Director Jamie Pherous said the two firms had a great understanding of each other’s culture and leadership teams, which would allow for a seamless integration process.
“Lotus is a long standing and highly regarded travel leader in Hong Kong. They
meet our strict acquisition criteria and, like CTM Asia, are leaders in travel in the region and enjoy high client and staff retention,” he said.
Having operated for more than 60 years, Lotus is a market leader in Hong Kong across the corporate, B2B, wholesale and MICE markets. It employs 400 staff and has offices in Hong Kong and Greater China.
“We have known the CTM Asia leadership team for many years and have watched CTM Asia build a very strong growth business based on highly personalised service delivery with best-in-class technology solutions,” Chairman and CEO of Lotus Travel Group, Patrick Kong, said.
The acquisition will contribute approximately AU$$4 million (HK$24m) earnings before interest, tax, depreciation and amortisation (EBITDA) over nine months trading to CTM’s 2019 annual results.
Pherous said CTM expected to deliver FY18 results at or slightly above the top end of the previous guidance, at approximately AUD$125m (27% growth on p.c.p).