Travelzest acquires Canadian luxury cruise retailer for £6.5 million

Travelzest plc has acquired the Canadian luxury cruise retailer, The Cruise Professionals Limited, for an initial consideration of £6.5 million (CAD 13 million) from its owner, Mary Jean Tully.

The consideration comprises £5.75 million in cash (CAD 11.5 million) and the issue of 682,000 shares in Travelzest at a price of 110p. In addition, Mary Jean Tully will become entitled to a further payment of up to £750,000 (CAD 1.5 million) payable in shares in Travelzest plc subject to the achievement of targets in the business for the 12 month period to 30 April 2009.

The consideration is funded through the placing of 2,222,222 new ordinary shares to an institutional investor at 90p per share and an increased debt facility agreed between Travelzest and Barclays Bank Plc. The new debt facility is for a total of £16 million and replaces the existing facility in place between Travelzest and Barclays. The facility is for a four-year period expiring in May 2012.

The Cruise Professionals is a retailer with an online presence offering luxury cruise experiences, providing its customers with a bespoke service selling itineraries in the most luxurious suites on the popular cruise lines. Destinations include itineraries from around the World, including Antarctica, Australia, New Zealand, The Orient, South Pacific and Northern Europe. It specialises in World cruise voyages with itineraries of 100 days or longer.

According to a release, un-audited results for the business for the period to 30 April 2008 show a total transaction value of CAD 33.7 million (£16.9 million) which represents turnover of CAD 4.6 million (£2.3 million). After adjustment for overhead costs relating to the previous owner and other non recurring costs, which cease upon acquisition by Travelzest, the operating profit is CAD 1.9 million (£950,000). The business is estimated to have net assets of CAD 1.1 million (£550,000) on completion and is expected to be earnings enhancing.