Webjet expands its footprint in the fast growing Asian travel market
Yesterday, Webjet announced the acquisition of Zuji for US$25m, or 4.6X estimated EBITDA of $5.4m, from Sabre Holdings.
Zuji adds $300m of Total Transaction Value (TTV) and expands Webjet’s footprint in the fast growing Asian travel market. For context, Webjet’s TTV for the year to June 2012 was $768m, up 30% year on year.
Zuji has strong brand awareness in Hong Kong (TTV of US$135m) and Singapore (TTV of US$135m) and Webjet will be working hard to expand this presence across the Asian region.
Webjet are conducting a capital raising at $3.60 per share to fund the entire purchase price and this should leave the company with over $30m of net cash on hand. The number of shares on issue will increase by 9.4% from 73.1m to 80.0m. There are $9m of synergies available and, if delivered, the acquisition will be mid single digit EPS accretive in the year to June 2014.
Given both the Montgomery [Private] Fund and The Montgomery Fund are shareholders of Webjet, we will be closely monitoring these forecasts.
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
