On the Beach buys rival site in £12m deal
Online holiday retailer On the Beach Group has acquired rival online travel agent Sunshine.co.uk for £12m.
The Cheadle-based group said it will fund the deal from existing cash resources and through an extension to its existing working capital revolving credit facility with Lloyds Bank.
The consideration will be split with 75% paid on completion and the remaining 25% in December.
Sunshine reported gross assets of £18.6m and EBITDA of £1.6m in its latest accounts for the 13 month period to 30 September 2016.
On the Beach is one of the UK’s largest online retailers of beach holidays with a 20% share of the online short haul beach holiday market. It has called the acquisition was “highly complementary” – it will add around 200,000 customers to its existing 1.2m customer base – and said it will be earnings enhancing in the current financial year, with the benefits of scale and further margin opportunity.
Simon Cooper, chief executive of On the Beach Group, said: “We are delighted to have acquired a brand as well-established with beach holidaymakers as sunshine.co.uk.
“This earnings enhancing transaction reflects the board’s ambition to consolidate On the Beach’s leading position in the online beach holiday space while supporting our drive to exclusivity and underpinning our ability to further leverage our scale.”
The shareholders of sunshine.co.uk were advised by the team at Convex, led by Mike Driver.
Last month, private equity firm Inflexion sold half of its shares in On The Beach for £42.9m.
It first invested in the business in 2013 as part of a £73m buyout and remains the company’s largest shareholder with 11.8% of the listed company’s issued share capital. Cooper is the second largest holder with a 10.9% stake.
Last year, On the Beach battled challenging trading conditions, including fear of terrorist attacks, to deliver a 47% increase in pre-tax profits to £21.3m, with a turnover of £71.3m for the year to the end of September 2016.
