Helloworld votes to acquire Express Travel Group

At a shareholders meeting this morning, Helloworld overwhelmingly voted to acquire Express Travel Group.

The $70 million acquisition will be paid in two tranches.

The first will be a combination of a cash payment of $40m and the issue of new Helloworld shares equal to $10m, while the second tranche will comprise a $15m cash payment and the issue of $5m worth of Helloworld shares.

The acquisition received almost total support from those in attendance, with 99.75 per cent of the votes being for the move.

The Helloworld Directors said the following of the proposed transaction:

It presents an opportunity for Helloworld to expand its existing retail network presence in Australia and New Zealand;
It is strategically compelling for Helloworld as it recognises that the ticket consolidation business of ETG and Helloworld together will enable a competitively stronger business;
It represents an attractive financial impact, with earnings accretion expected from FY2024 and a reasonable multiplier of 7 times forecast earnings for FY2023;
It enables strong synergies through the use of Helloworld’s Smart Tickets solutions, enabling the ETG agent networks to engage with the best in market solutions while continuing to work with the ETG team; and
The two-tranche payment and escrow agreement for the consideration shares provides a further de-risking of the transaction.

“The proposed acquisition of Express Travel Group represents a strong strategic opportunity for Helloworld shareholders and is expected to be earnings accretive in FY24,” Helloworld CEO Andrew Burnes said.

“The acquisition will make both businesses more competitive in a changing travel industry and enhance the service capability of Helloworld and ETG, providing benefits to agents, suppliers and consumers.

“The existing management personnel, including CEO Tom Manwaring, will remain with ETG as part of the wider Helloworld group and continue to support their agent networks and customers.

“The ETG business has been one of the most successful travel operations in Australia and New Zealand in the ticketing, retail network and distribution sectors, which will continue to grow under Tom’s leadership,” Burnes concluded.

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