Tourism Holdings set to purchase Apollo Tourism & Leisure

Tourism Holdings said it would fund the purchase through an issue of shares. Photo / Supplied

By RNZ

Campervan and tourism company Tourism Holdings Limited (THL) has entered into an agreement to acquire Australian tourism company Apollo Tourism & Leisure.

THL would fund the purchase through an issue of shares, with one THL share offered for every 3.68 Apollo shares held by the Australian company's shareholders.

The merged entity would be owned by approximately 25 per cent of Apollo's shareholders and 75 per cent of THL's investors.

"THL is proactively moving to build a more resilient business and expand its international reach, rather than seeking to wait out market uncertainty from the pandemic," THL chair Rob Campbell said.

He said the merger would help both companies manage the uncertainty the tourism industry continues to face, as a result of the pandemic.

THL chief executive Grant Webster said the deal would create a more resilient business that had a larger presence on the global stage.

"This takes THL into more markets, as a global commercial RV rental leader with businesses in Canada and the US, Europe and the UK as well as our Australasian operations, supported by strong manufacturing capability and retail vehicle sales in Australia and New Zealand," he said.

THL said the merger would add between $17 million and $19m to its underlying earnings on a yearly basis.

It said the deal would also reduce its debt levels by $40m, as it would need fewer vehicles.

The transaction is subject to approval by Apollo shareholders, as well as funding, court and regulatory approvals in Australia and New Zealand, and other conditions set out in the scheme of arrangement implementation deed.

This was expected to be completed by the second quarter of 2022.

If the deal is successful, THL would apply for a secondary listing on the Australian stock exchange.

Apollo managing director Luke Trouchet, who would become a major shareholder in THL should the deal progress, said the two businesses have similar operation and like minded culture.

"We both believe strongly in the potential of the global RV market," he said.

Tourism Holdings provides a trading update

THL said the first half would result in a net loss of between $4m and $7m, including about $2m in transaction costs incurred to date for the Apollo deal.

It said the outlook for the full year was uncertain, as there was unlikely to be any meaningful travel between New Zealand and Australia in the period ending June.

The company said it was closely monitoring development of the Omicron Covid-19 variant to see what impact it had on travel sentiment and international and domestic travel restrictions.

- RNZ