HLO moves on Magellan

THE Australian travel industry continued its ongoing consolidation today, with the announcement that Helloworld Travel will acquire the Magellan Travel Group ( TD breaking news).

A Heads of Agreement has been signed, with the transaction still “subject to the execution of formal transaction documentation” according to an official HLO ASX announcement.

Helloworld Travel Limited ceo Andrew Burnes said the deal would “improve the scale of our operations throughout Australia and give Magellan members the opportunities to take advantage of that scale and at the same time benefit from our significant investment in technology and distribution strategies”.

Helloworld is paying $32.5 million for Magellan, with a mixture of 35% in HLO shares and 65% in cash, which will be funded via existing facilities.

Burnes said the deal was expected to be “earnings accretive” and to “increase the volume of TTV that Helloworld Travel members transact with travel suppliers in Australia and globally by approximately $900m”.

Magellan md Andrew Macfarlane and the group’s existing management team will join Helloworld, with Magellan forming a sixth network under the Helloworld Travel umbrella, operating in its current format.

Burnes welcomed the 130 Magellan agents, saying many were formerly with Helloworld and its predecessors.

“With the significant changes we have made in the Helloworld business over the last two years we are looking forward to welcoming them back,” he said.

The transaction is expected to settle next month, after which Helloworld Travel will have more than 2,300 members in Australia and New Zealand, including 1,800 retail and corporate agencies and over 470 travel brokers.