Le Passage to India goes shopping

LE PASSAGE to India (LPTI), which is half-owned by TUI, is on the hunt to acquire agents in India in a bid to grow regionally.

Managing director Arjun Sharma said both partners believed in India and felt that an acquisition strategy would help the company grow faster than growing organically.

Sharma said they would be on the lookout in the next six months for “a medium-sized agency with a turnover of US$5-US$6 million and producing some 10,000 tourists into India”.

Agencies that fit the bill would be ones that could fill existing gaps, both in terms of geographical markets and products. Priorities are markets such as North America, China and Australia, and products such as adventure and pilgrimage tours.

LPTI would retain the company’s management and branding, and would seek to buy up to 79 per cent of the agency, thereby ensuring that its “entrepreneurial spirit” remained after the buy-out, while it provided strengths such as central purchasing and operational expertise, he said.

“This is why we’re also looking for the right owner, who still wants to grow the company, not someone who wants to retire.”

But Sharma said expectations of sellers were currently high, as they wanted four to five times the earnings. “While the market looks good, there is fragility in the long-term and these expectations must be managed.”

“A price tag of US$5-US$10 million would probably be more realistic for the mid-sized agency and, once again, it’s not for the sake of acquiring, it has to fit,” he added.

LPTI operates 13 brands covering markets such as luxury and MICE. Asked if it was inspired by Cox & Kings India’s takeover of Holidaybreak UK (TTG Asia e-Daily, July 29), which is expected to be completed by the end of this month, Sharma said: “They are showing us the way.”

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