Expect M&A activity to take twice as long as anticipated, travel told
Ilaria Grasso MacolaTravel professionals looking to sell their businesses, or acquire another, have been told to think carefully about how long they would ideally like and anticipate the process to take – and then double it.
Simpson Travel managing director Ed Pyke told Barclays Travel Forum delegates on Wednesday (9 May) it took the villa specialist two years to find an investor and then complete the sale of an undisclosed stake in the business, eventually inking a deal with private equity firm Risk Capital Partners in March.
Founded in 2002 by actor-turned-tour-operator Graham Simpson, who previously set up and ran Simply Travel before selling it to Thomson Holidays – now Tui – in 1999 for £30 million, Simpson Travel has now successfully transitioned from a family-owned business to an investor-owned proposition.
The deal saw Pyke promoted to the role of managing director, with former Hotelplan chief Paul Carter coming in to replace Simpson as chair. He remains involved with the business in an advisory capacity, while his children Mathew, Daniel and Hannah have retained their roles as product director, commercial director and head of trade sales.
Pyke told delegates the key to successful mergers and acquisitions was to surround yourself with a strong group of advisors, especially with regards to corporate finance. “I spoke to him [Simpson’s corporate finance expert] every day for a year without fail," said Pyke. "But it brought us through to the other end."
Pyke urged anyone pursuing a sale to focus on their story to show potential suitors where they have come from and where they are heading.
"Storytelling, articulating where the business has been and, more importantly, where it’s going is fundamental,” said Grant Thornton head of consumer and travel Nicola Sartori.
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Simpson’s acquisition comes at a “buoyant” time for travel industry M&A with the pace picking up after several tough post-pandemic years; Awaze’s decision to mothball its James Villas brand last October, in particular, has stoked interest in the villa sector.
“There’s a lot of interest in the [travel] sector at the moment,” Sartori continued. “We saw a lot of trade last year, but we’re starting to see a lot more private equity now.”
Travel Trade Consultancy director Martin Alcock added: "It’s a very positive environment and the window of private equity definitely feels like it’s open. I’m sure we’re gonna see a lot more transactions completed over this next quarter.”
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