Regulatory Story
Go to market news section View chart   Print
RNS
Thomas Cook Group PLC   -  TCG   

Expanding presence in Russia with new JV

Released 13:00 22-Mar-2019

RNS Number : 7615T
Thomas Cook Group PLC
22 March 2019
 

 

Thomas Cook to expand presence in Russia with new joint venture

22 March 2019 - Thomas Cook Group announces that it has agreed to enter into a joint venture agreement with Ionic Invest, to buy the tour operator of Biblio Globus, one of the largest tour operators in Russia. The joint venture, in which Thomas Cook intends to assume a 30% minority stake, will give Thomas Cook a leading position in a growing market, help to further diversify the Group's customer base, and enable it to secure additional flight capacity to support the future growth in its existing Russian business.

Ionic Invest is owned by Sarpedon Travel, a leading destination management company (DMC) and longstanding partner of Thomas Cook Group.

Founded 25 years ago, Biblio Globus has around 3 million Russian customers, of which just over half holiday domestically within Russia and the remainder holiday abroad, with over 50 direct destinations on offer. Biblio Globus benefits from access to premium flight capacity through a stable long-term commercial relationship with Rossiya, a subsidiary of Aeroflot. On acquisition, Thomas Cook's existing Russian tour operating business will also benefit from this relationship, opening up further growth opportunities from Summer 2019.

Thomas Hohn, Chief of Continental Europe Source Markets, Thomas Cook, said: "The acquisition of Biblio Globus in partnership with Ionic Invest gives Thomas Cook a unique opportunity to expand our presence in Russia and tap into new opportunities in a growing market. With its strong brand, best-in-class technology and diversified destination mix, Biblio Globus will help strengthen our tour operating business in Russia while at the same time introducing a new group of customers to our own-brand hotels in the Eastern Mediterranean."

Under the terms of the agreement, the joint venture will acquire 100% of Biblio Globus' tour operator for an initial cash consideration of $10 million. Thomas Cook Group intends to acquire a 30% stake in the joint venture for a consideration of $3 million on completion, expected by the end of May 2019, subject to satisfaction of certain conditions precedent and receipt of customary regulatory approvals. The existing management team will continue to be involved in the business.

Further cash consideration of $10 million will be payable and funded by the joint-venture business in January 2020. An earn-out is also in place linked to achieving aggressive three-year operating profit targets. The total maximum cash consideration payable by the joint venture business, including the initial consideration, is $150 million. The earn-out payment will be wholly satisfied through internally-generated cashflows from the new joint venture business.

Biblio Globus is one of the largest tour operators in Russia, where the outbound tourism market has grown by 15% in volume, on average, in the last three years. The gross assets of Biblio Globus on completion are expected to be £40 million, and profit before tax in the twelve months to 30 September 2019 is expected to be £12 million.

-ENDS-

About Thomas Cook Group Plc.

Thomas Cook Group plc. is one of the world's leading leisure travel groups, with sales of £9.6 billion in the year ended 30 September 2018. It is supported by 21,000 employees and has 200 own-brand hotels. It operates from 16 source markets and serves over 22 million customers annually. Thomas Cook Group plc's shares are listed on the London Stock Exchange (TCG).

 

Contact Details:

Analysts & Investors:

Tej Randhawa, Thomas Cook Group

+44 (0) 20 7557 6487

Media:

Chris Alfred, Thomas Cook Group

+44 (0) 20 7294 7203

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
JVEDMGZFZZVGLZM
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Expanding presence in Russia with new JV - RNS