Corporate Travel Management (CTM) has announced its acquisition of the majority stake in Hong Kong-based Lotus Travel Group Limited (Lotus) in a deal worth HKD$300 million, as it continues its strategic expansion into the Asian market.
The purchase of 75.1% of Lotus will take effect from 2 October 2018. As a result, CTM will become the largest travel management company in Hong Kong serving Greater China, with a combined total transaction value approaching HKD$15 billion. Ever Prestige Investments Limited (EPI), CTM’s partners in Asia, will acquire the remaining 24.9% through CTM Asia.
CTM managing director Jamie Pherous said:“We are delighted to have Lotus become a key part of our Asian business. Together, we will become a leader in the Greater China market and will be well positioned to enhance our client offering, technology and expertise in this market.”
He also commented that the two firms have great understanding of each other’s culture and leadership teams, which will allow a seamless integration process.
“Lotus is a long standing and highly regarded travel leader in Hong Kong,” said Pherous. “They meet our strict acquisition criteria and, like CTM Asia, are leaders in travel in the region and enjoy high client and staff retention.”
Having operated for more than 60 years, Lotus is a strong brand in Hong Kong across the corporate, B2B, wholesale and MICE markets. It employs 400 staff and has offices in Hong Kong and Greater China.
Patrick Kong, chairman and CEO of Lotus, said: “We have known the CTM Asia leadership team for many years and have watched CTM Asia build a very strong growth business based on highly personalised service delivery with best-in-class technology solutions.”
“We consider that CTM is an excellent fit to enhance our service offering to both current and future clients, while providing exciting new career opportunities for our employees that comes through growth.” said Kong.
The acquisition will contribute approximately HKD$24 million earnings before interest, tax, depreciation and amortisation (EBITDA) over 9 months trading to CTM’s 2019 annual results. Pherous said CTM expected to deliver FY18 results at or slightly above the top end of the previous guidance, at approximately AUD$125m (27% growth on p.c.p).