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Corporate Travel Management buys UK and US travel companies
CORPORATE Travel Management (CTM) has shored up its global expansion strategy, acquiring Chambers Travel in Europe and Diplomat Travel in the US for a combined $52.6 million.
The move continues CTM’s long-held strategy to establish a strong base in the UK and European markets and boost the Brisbane-based international travel management group’s expansion to North America, said CTM managing director Jamie Pherous. 
Both acquisitions take effect from January 2 and not only give CTM a strong client base expansion but also bring new capabilities into the fold. Multi-award-winning travel management company Chambers Travel, for example, services clients in 10 European languages, giving CTM an additional competitive advantage.
Chambers Travel and CTM have successfully worked together on winning and servicing clients for over a decade and 60 percent of Chambers’ clients are global. Chambers Travel won Best Agency in the UK in 2013 and 2014, and is a finalist in 2015.
Chambers Travel is headquartered in London, with operations in England, Scotland, France, Germany, The Netherlands, Switzerland, Sweden and the Czech Republic. Mr Pherous said the purchase establishes an immediate and mature scalable presence in eight countries in Europe for CTM, the last key region in the company’s global strategy, “making CTM even more competitive in the global/regional client segment, estimated at US$200 billion”.
“We are delighted to have Chambers Travel become our anchor point in the UK and Europe to lead future growth in this region,” Mr Pherous said. “This partnership culminates a decade of successfully working together allowing a seamless transition for our respective management teams.
“Chambers is a multi-award winning company with an excellent track record of winning and servicing regional and global clients. Together with our well established businesses in the Asia Pacific and North America, we have a significantly improved our offering for regional and global clients, particularly for travel across the Atlantic.”
Diplomat Travel is a travel management company headquartered in Washington DC. Its acquisition expands CTM’s UScoverage to the East Coast. Mr Pherous said CTM would now cover all major time zones in the US and operate out of 18 cities across eight states.
“Both acquisitions meet our strict acquisition criteria,” Mr Pherous said. “They possess capable and passionate management teams, are leaders in corporate travel in their respective regions, enjoy high client and staff retention, and will have significant ownership in CTM via CTD stock (CTM’s ASX code).
“Meanwhile, Diplomat Travel has a highly capable team with some of the finest expertise in the industry that we have ever seen. The Diplomat Travel team will provide an excellent East Coast base to deliver future growth,’’ he said.
The acquisitions are expected to be earnings-per-share accretive in the 2015 Financial Year and will be funded by a fully underwritten Entitlement Offer of fully paid ordinary shares to eligible shareholders at $8.80, led by Australia’s Morgans Corporate Limited.
The acquisitions are expected to contribute about $4 million in earnings before interest, tax, depreciation and amortisation (EBITDA) over six months trading to CTM’s 2015 annual results.
Mr Pherous, said the CTM board expected the company’s 2015 EBITDA guidance to be above $45 million, based on the new acquisitions plus CTM Group’s initial guidance of more than $41 million, to be refined after the 2015 half year results. He said growth would be in line with CTM’s proven business strategy focussing on personalised service, tailored technology solutions and a commitment to delivering a return on investment.
“As a result of these acquisitions, CTM will now operate in 46 cities, across 23 countries, on four continents; employing over 1,800 staff worldwide,’’ Mr Pherous said.
Chambers Travel CEO, Chris Thelen, said the company had watched CTM build a strong business over the years, based on highly personalised service delivery with best-in-class technology solutions to deliver meaningful return on investment to clients.
“We share this same philosophy,” Mr Thelen said. “As the new European regional headquarters for CTM, we are significantly enhancing our service offering to clients, while providing exciting new career opportunities for our employees.
Diplomat Travel managing director, Denise Guida, said CTM had developed a unique culture of support and empowerment, and had a well-established sales team in North America.
“This has a significant benefit in allowing us to be more creative and responsive in our effort to provide our highly customized travel service to a greater client base into the future,’’ Ms Guida said.
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