COX & KINGS INDIA has bought out UK-based Holidaybreak, an educational tour and camping holiday specialist, for £312 million (US$510 million) in cash. Holidaybreak has operations in the UK, Ireland and the Netherlands.
“It’s a very defensive and recession-proof product. We believe that educational travel is the way to grow in the future,” said Peter Kerkar, executive director of Cox & Kings.
“I am proud of the significant progress we have made towards our objective of transforming Holidaybreak into an education-focused business, both through expansion into the pan-European education market through the acquisition of Meininger and by building on our high-quality brands,” said Martin Davies, group chief executive of Holidaybreak.
Of the £312 million, £125 million will be funded from the company’s cash reserves and the rest will be raised as debt from India’s Axis Bank.
The company expects the acquisition to boost its earnings and meet the growing demand for educational travel, with the strong brands it will be inheriting. The company will also continue to look at smaller acquisitions of specialised travel firms across the globe, added Kerkar.
Holidaybreak is nearly seven times as large as Cox & Kings in terms of revenue. Its education division, which provides residential outdoor education and adventure trips for school children, was the most profitable in 2010, with revenues of £121.1 million. Last year, the company also picked up a 50 per cent stake in Meininger, a German school trip accommodation provider.
Cox & Kings earns about half of its overall revenue from international operations and has been looking for acquisitions to boost its share in the booming outbound market and augment future earnings.