Travelocity sells Asia-Pacific agency Zuji to Webjet for $25 million
The decision to offload Zuji marks almost six years since Travelocity-parent Sabre Holdings took full control of the company from its original collaborative ownership structure of Abacus and a number of airlines in the Asia-Pacific region.
The entire business (it runs a number of sites and offices in Asia-Pacific, including India, Australia, New Zealand, Hong Kong and Singapore) will transfer to Webjet as part of the deal.
Webjet says the deal is subject to regulatory approval and will give it around AUS $300 million in total transaction value on an annual basis, based on current figures.
Motivation for acquisition at Webjet’s end is to expand its “marketing footprint” in growth markets around Asia and “substantially shape leisure distribution online to coincide with the rapidly changing structural elements of aviation in the APAC region”.
Webjet managing director John Guscic adds:
“Zuji will fast track the development of Webjet’s global hotel contracting and online hotel distribution strategies with substantial synergies available in conjunction with our hotel aggregation model and our Lots of Hotels B2B business in the Middle East.”
The deal will be funded by a placement of approximately 6.9 million new Webjet ordinary shares to raise approximately AUS $25 million of additional capital. Credit Suisse (Australia) was appointed to underwrite and manage the acquisition.
Travelocity global president, Carl Sparks, says “the strength of the Zuji brand and business across the APAC region made it an attractive proposition for Webjet and we believe that this is the best option for future success of the Zuji business, its employees and customers”.
Clearly much has changed in the six years since Travelocity took full control of the business, with talk back in 2006 concentrating on how the mothership would share its technology and experience into Zuji, as well as offer existing suppliers further exposure in to the region.
Markets singled out at the time included the giants of the region, India and China.
Kevin May is a senior editor and one of the co-founders at Tnooz. He was previously editor of UK-based magazine Travolution and web editor of Media Week UK from 2003 to 2005.
He has worked in regional newspapers (Essex Enquirer) and started his career in journalism at the Police Gazette at New Scotland Yard in London. He has a degree in criminology, a postgraduate diploma in magazine journalism and will be publishing his first book - a biography about electronic band, Depeche Mode - soon.