Quick turnaround for Laterooms in £20m deal
INDIAN leisure business Cox & Kings has sold Manchester-based LateRooms for £20m, just six months after buying the business.
It is a considerable uplift on the £8.5m the Bombay Stock Exchange listed company paid when it bought the business from German travel firm TUI Group in October last year but still a fraction of the £108m its previous owner, First Choice, paid for it in 2006.
LateRooms was founded by three brothers who owned a Salford marketing agency. They sold a stake to private equity firm ECI, which unlocked further growth and led to the £100m acquisition by First Choice.
It has a 3.5 million opted-in and active consumer database and had around 93 million online visits in the financial year ending September 30 2015, generating total transaction value (TTV) of £300m and net revenues of around £50m.
Cheshire-based education holidays provider Holidaybreak, a 65.6% owned subsidiary of Cox & Kings, has meanwhile disposed of its Superbreak business for a total value of £26.7m. Holidaybreak received net cash of £9.25m and the goodwill write-off on sale of Superbreak was £71.4m.
Holidaybreak was acquired in a £312m deal in 2011 by Cox & Kings. Since then the Indian group has been selling off parts of the Holidaybreak business, selling a division of the business Explore Worldwide in December 2015 for £25.8m, and in 2014, offloading its camping division.
Both LateRooms UK and the Superbreak businesses were sold to private equity backed Malvern Enterprises UK with the aim of aiding its growth into the city break market.
At the same time, Cox & Kings bought a 49% stake in Malvern for £6.37m. The remaining 51% is held by a European private equity investor.
In a statement, Cox & Kings said the transaction will allow Malvern to “independently follow its own strategic growth path in the underpenetrated city-breaks market within the online package-tour space”.
“Brands Superbreak and LateRooms are likely to gain substantially from a unified management team under the strategic guidance of the private equity investor and C&K.”
Eversheds’ Manchester partner Daniel Hall advised Cox & Kings on the disposal of LateRooms and Holidaybreak on the disposal of its Superbreak business.
