TUI is selling its Hotelbeds unit for €1.2 billion
TUI, the world’s largest tourism group, has agreed to sell its Hotelbeds unit to private equity group Cinven and Canada Pension Plan Investment Board (CPPIB) for €1.2 billion.
The deal, expected to complete by the end of September, is still subject to customary closing conditions and certain regulatory approvals.
Hotelbeds is the largest independent business-to-business (‘B2B’) bedbank globally. The company offers hotel rooms to the travel industry from an inventory of 75,000 hotels across 180 countries over 120 markets.
The business, based in Palma de Mallorca, has a market share of six percent and reported turnover of 1.06 billion in the year to end September 2015.
The buyers plan on expanding Hotelbed’s presence in the Middle East, Asia and the Americas.
Commenting on this transaction, Jorge Quemada, Partner at Cinven, said:
“Hotelbeds Group is a strongly performing business with the largest accommodation distribution network within the overall B2B bedbank market offering broad client reach globally.
“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.”
Joan Vilà, CEO of Hotelbeds Group, commented:
“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 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. We look forward with anticipation to supporting the growth of our trade partners in this next stage of our development.”
TUI will use the proceeds to invest in further growth and strengthen its balance sheet. CEO Fritz Joussen told German magazine WirtschaftsWoche on Thursday that the tourism giant will likely invest in its hotel operating business and try to attract more business from China.