IT was a deal waiting to happen, observers say of the acquisition of Etravel Group by Booking Holdings for 1.63 billion Euros announced this week.
The two companies had been in partnership the last couple of years with the Sweden-based Etraveli Group powering Booking Holdings’ entry and expansion into flights, and Matthias Hedlund, CEO of Etraveli Group, openly saying the group was due for an exit from its existing owner CVC Capital Partners.
It would also appear that Hedlund’s strategy of focusing on B2B to build Etraveli Group into the world’s largest flights platform has paid off. At the WiT Travel Roadshow in July, Hedlund was asked to comment on a potential exit and recent valuations – specifically the recent development that saw South Korea’s Yanolja raise US$1.7b to develop a global meta-platform.
His response was valuations were not something that worried him “because if you have a really strong growth and have high profitability, you will be valued by the public market or investors. We have proven that before in our previous rounds. You have to do what you can with what you are, and yes, there are some incredible valuations out there for certain type of companies, and especially within payments, etc but that’s not us. We are trying to be the absolute best that we can be in, in our segment of the market, and doing so globally.”
In an interview with WiT in July, speaking of its partnership with Booking, Hedlund, who was seen at Phocuswright with business development director Lisa Katsouraki, said, “… it expands every week actually; it’s been very busy now over summer as well, when we’re launching new markets, new features. It’s a very tight cooperation where Booking.com is building on its connected trip and flight is an anchor product for the connected trip.”
The following is the report from Phocuswire.
ETraveli Group is now part of the Booking Holdings portfolio of businesses following a €1.63 billion takeover.
Existing owner CVC Capital Partners has owned the Sweden-based business since 2017.
It’s the second major acquisition for Booking Holdings in the space of two weeks, after it bought hotel distributor Getaroom for $1.6 billion.
Booking Holdings brand Booking.com secured a partnership deal with ETraveli in October 2019 to power its nascent flight ticketing service. In the third quarter of this year, total company air tickets were up 131% compared to the same quarter in 2019, and Booking Holdings CEO Glenn Fogel attributed the growth in part to Booking.com’s flight offering, which is now live in 27 countries.
In a call with analysts November 3 about those quarterly results Fogel said, “We continue to scale up a robust flight platform… We are seeing that over 25% of Bookings’ flight bookers are entirely new customers. With these new customers we are seeing an encouraging attach rate of accommodation bookings. However there is more work to be done to further optimize the cross-sell opportunities.”
And now Booking Holdings is positioning this deal as part of “ongoing work to build a frictionless global flights offering.”
Fogel says: “As international air travel rebounds from the impact of the pandemic, we look forward to building upon our existing relationship with Etraveli Group to make the travel booking experience easier and more seamless to support our partners and customers.”
ETraveli Group will remain as a standalone brand, headquartered in Sweden, with the existing management running operations.
It has other offices in Greece, Canada, India and Argentina, with more than 1,000 employees and more than 20 divisions.
Brands in the group include Gotogate, Flygresor, Seat24, Mytrip, virtual interlining technology provider TripStack and Flight Network – the last two being bought in June 2019.
Mathias Hedlund, CEO of ETraveli Group, adds: “Today is a day of recognition, as well as marking a new phase in our relentless urge to improve further. We are thrilled to become a part of Booking Holdings, and we look forward to the next chapter of our own development as we continue to enhance the flight booking experience for our customers and partners worldwide.”
ETraveli Group has been through a number of deals over the last five years, having been sold by private equity house Segluah in 2015 to German media group ProSiebenSat.1.
Just 18 months later, ProSiebenSat.1 offloaded the business to another private equity company CVC for €508 million.
In its most recent earnings report, Booking Holdings reported an increase in revenue for the third quarter of 2021, notching $4.7 billion, just shy of Q3 2019 revenue of $5 billion.
Watch interview with Mathias Hedlund at WiT Travel Roadshow July edition.
