Travel agency Gullivers Travel Group has spread its wings and moved offshore with the $23 million purchase of UK travel company Pacific International.
It is the company's first acquisition since listing on the NZX last December, when it became this country's first listed travel agency.
Company founder and managing director
Andrew Bagnall said buying Pacific International was a good fit with the existing Gullivers operation, with almost no "cannibalisation" of its operations.
Buying the debt-free company would be earnings positive in the 2007 financial year and means it can now tap into the growing inbound tourism market, while also making big savings in IT.
The new company adds to the plethora of brands and businesses already coming under the Gullivers umbrella.
It now allows greater outlets for the sale of what is termed "wholesale product" - packages of airfares, hotels, rental cars, bus tours and cruises.
Included in the Pacific International purchase is the master franchise for Harvey World Travel in New Zealand and GO Holidays wholesale business and retail outlets.
The market reacted well to news of the Pacific International buy, with Gullivers' share price rising 8c to $1.58.
Bagnall said buying the UK and Australian operations would take in the "high growth inbound tourism markets of Australia, New Zealand and Fiji".
"We are sitting right at the hub between Australia and New Zealand and the South Pacific of an enormous growth in global tourism, rather than inbound.
"And we see increasingly we're going to be able to get some of that marketplace and be far less reliant on the activities that happen within New Zealand."
Gullivers had been looking at the inbound market for some time, looking for the right opportunity to buy. There was now a "close fit" with key strategies of growing the franchise business, expanding distribution channels for wholesale content and continuing investment in IT.
In spite of its share price failing to make much ground since listing, Gullivers has been able to attract some interest from new institutional shareholders in the past few months.
These include AMP, with a 12.7 per cent stake, Tower with 7.3 per cent and the Accident Compensation Corp with 4.6 per cent. Bagnall owns 28.8 per cent of the company.
Pacific International chief executive Rick Felderhof and the existing management and staff in all locations will continue in their jobs.
