Webjet $240m purchase

WEBJET will spend $240 million buying Dubai-based Destinations of the World (DOTW), an accommodation wholesale platform it says will consolidate its position in the business-to-business arena.

The company has operations across the Middle East, Europe, Asia-Pacific and the Americas, and will be purchased using $102 million in debt as well as an entitlement offer to existing shareholders worth approximately $153 million (TD breaking news).

“DOTW is highly complementary to WebBeds’ existing portfolio and significantly enhances WebBeds’ existing Asia-Pacific and Americas businesses, while further expanding its presence in Europe and the Middle East and Africa regions,” said Webjet Managing Director John Guscic.

“In addition to providing 5,600 unique new contracts, the overlap in existing directly contracted hotels will deliver increased depth to our global inventory offering,” he said.

The addition follows Webjet’s acquisition of JacTravel in 2017, which Guscic said had been largely integrated and was continuing to drive growth.

DOTW generated a TTV of US$529 million in the year to 30 Jun, with earnings (EBITDA) of US$16.4 million.

Webjet will issue approximately $28 million in new shares to continuing management shareholders and the private equity vendor of DOTW at an issue price of A$12.77 per share.

The acquisition is expected to be completed on 22 Nov.

Webjet also issued an earnings guidance for 2018-19, saying it was on track to deliver underlying EBITDA of at least $110 million, up from the $87.4 million of last financial year.