So who saw that coming?

Heloworld ’s acquisition of 50% of Mobile Travel Agents took many by surprise. Sure, Andrew Burnes appears to be getting the business into better shape after years of upheaval and neglect, but hitting the acquisition trail was somewhat unexpected. The deal to buy 50% of MTA for $14m, money provided via a $30m capital raising, will see Helloworld enter the home-based market, widely regarded as a growth sector of travel retailing. But was it a shrewd investment? There is no reason to suggest otherwise. MTA financials certainly look strong. Total transactional value has risen from $103m in 2013 to almost $170m this year, with gross profit up from $5m to $8.5m over the same period. While the rate of earnings growth did slow from 35% to 25% over the past year – still very healthy growth it should be said – MTA is clearly in robust shape. That in no small part is down to its owners, Roy and Karen Merricks, who have spent the best part of 25 years building the home-based network into what it is today. They have been responsible for both its growth and its culture. And home-grown, family-owned businesses have a culture of their own, which is why it was so important the Merricks remained at the MTA helm. That may change in five years should Helloworld exercise its option to acquire the remaining 50% of MTA. But for now, the Merricks, and chief executive Don Beattie, continue to run the ship, and for that, MTA’S 350 members will be relieved. In the same way footballers ‘run through walls’ for a coach they respect, so in business staff pull out the stops if they believe in the management and the strategy. The importance of the Merricks to MTA and its members is not meant as a criticism of Helloworld management, or their ability to grow the network. But over the years, I have covered the acquisition of many independent and family-run businesses which, despite protestations that it would not happen, lost their entrepreneurial spirit and culture the moment the founders departed. Business owners can often be the heartbeat of an organisation, so locking them in for as long as possible after an acquisition is often critically important. For Helloworld, the MTA deal was one of a series of interesting developments. Key to restoring stability and generating confidence at Helloworld has been reconnecting with agents and bringing them along for the ride. And notwithstanding the recent loss of Bicton Travel, Burnes has achieved that through a canny offer to make every Helloworld franchisee a shareholder. People want to feel part of something, no matter what it is, so giving agents ‘skin in the game’ was an astute move.