Cruiseco’s $319k price tag

HELLOWORLD’S (HLO) acquisition of Cruiseco late last year (CW 23 Nov 2020) saw the company pay a cash purchase price of just $174,000 for the wholesaler, along with a further $145,000 in “deferred consideration,” making up a total of $319,000.

The figures were revealed in Helloworld’s financial results this morning, with the top line amount rounded up to “$0.5 million” in the announcement.

Provisional assets and liabilities recognised from the Cruiseco deal included $283,000 in cash and cash equivalents, offset by $466,000 in trade and other payables as well as provisions amounting to $143,000.

The net assets were therefore actually a deficit of $326,000, with Helloworld balancing the books by recognising $645,000 in goodwill resulting from the acquisition.

Helloworld said this goodwill amount acquired “primarily represents the enlarged product and service offering that Helloworld Travel can now provide to its customers”.

Other goodwill elements included “future synergy opportunities and the future profitability of the business”.

“Cruiseco is a specialist cruise package wholesaler, enabling Helloworld Travel to expand its cruise offerings in Australia and New Zealand, complementing the existing cruise wholesale business,” the HLO update said.

Acquisition related costs of less than $100,000 were also incurred, the company noted.

Cruiseco was previously majority owned by Australian Pacific Holdings, with minority stakes held by co-founders Phil Hoffmann and Kevin Dale.