Lastminute buys Travelprice.com
In an all-share deal worth around £32 million, UK e-travel company Lastminute.com has purchased Travelprice.com, a rival in France and Italy.
Lastminute, which is often cited as a prime example of the rise and fall of a dot-com stock, said on Monday that the purchase of the French company would occur through the issuing of 34.6 million new Lastminute.com shares at £0.01 each.
It is also proposed that Roland Coutas, the chief executive of Travelprice.com, will join the executive committee of Lastminute.com, with effect from 1 March 2003.
The deal will see Travelprice.com merged into Lastminute's existing French operations. The move follows a flurry of other important purchases by Lastminute in recent months, including that of Destination Holdings, which operates the Travel4Less group of Web sites, for £12 million.
More recently, Lastminute bought Travelselect.com for £9 million.
The UK-based e-travel and on-line retailer claims that after its latest acquisition is completed, it will have enhanced earnings in the first full financial year following the purchase. Also, Lastminute insists that the asset will allow it to remain operationally profitable and will add £10 million in new available cash.
Earlier this year, Lastminute recorded its first UK and French profits, and it now says it expects to be profitable as a group by the end of this year.
Nonetheless, its stock has experienced a bumpy ride over the last 18 to 24 months, falling with the dot-bomb and taking further hits in the wake of 11 September, dropping below £0.20.
Since that time, however, the firm's value has increased four times over, with its shares now trading at around £0.92, valuing the firm at £190 million.
Travelprice.com offers customers on-line access to flights and package holidays in France, Italy, Spain and Belgium, and approximately 65 percent of its transactions were initiated on-line during 2001.
The company also runs a sales support services through a 24 hour/7 days a week call centre based outside Paris.
For the year to 31 December 2001, Travelprice.com achieved gross margins of approximately 9.5 percent and a loss before tax and after exceptional items of E23.2 million. Net assets at 31 December 2001 amounted to E7.2 million. The company's total transaction value more than doubled to E67.3 million in 2001 from the previous year. © ENN