The acquisition of Magellan by Helloworld (HLO) will be delayed, according to the latest ASX update from HLO.
HLO originally announced it would be acquiring Magellan in December of last year.
The update, released on Friday, 2 February, said:
Helloworld Travel Limited today announced that it anticipates the acquisition of the Magellan Travel Group, as announced on 19th December 2017, will complete by the end of February.
“We initially believed the transaction would settle in January however due to some complexities with the Magellan membership structure it has taken longer than initially anticipated for Magellan to complete the transaction.
“We are confident that the transaction will now complete by the end of the month”, said Andrew Burnes, Chief Executive Officer of Helloworld Travel.
Burnes also confirmed that Helloworld Travel will release its half-yearly results on Monday 19th February.
Helloworld Travel entered into a Heads of Agreement to acquire the Magellan Travel Group for $32.5 million in December.
The transaction, subject to the execution of formal transaction documentation, will be funded by a mixture of 65 per cent cash and 35 per cent in HLO shares, with the cash component to be funded from existing facilities.
Helloworld Travel Limited CEO, Andrew Burnes, said at the time the company was consolidating its position in the retail and corporate travel agency business in Australia and seeking to leverage its on-going technology developments and supplier relationships.
Burnes said, “We are delighted to welcome the 130 agents who are part of the Magellan network around Australia to the Helloworld Travel group.
“Magellan has been established for nearly ten years and has a great network of members in both the leisure and corporate agency businesses.
“Adding the Magellan network to the Helloworld Travel group will 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.”
Following completion of the transaction, Helloworld Travel will have over 2,300 members in Australia and New Zealand, comprising over 1,800 retail and corporate agencies and over 470 travel brokers.