Tui has agreed to sell its Hotelbeds subsidiary for €1.191 billion in cash.
The B2B hotels company has been acquired by GNVA Acquisitions Limited, a company ultimately owned by funds managed or advised by private equity firm Cinven and the Canada Pension Plan Investment Board.
The takeover is expected to be completed by the end of September. Tui described the disposal as a “significant step” in its progress as a “content-centric, vertically-integrated” tourism business.
“Proceeds will be used to invest in future growth opportunities and strengthen Tui’s balance sheet,” Europe’s largest travel group said.
“Hotelbeds was previously part of the group’s Specialist Travel division and comprises B2B hotel portals selling globally sourced accommodation online to wholesale customers such as travel agencies and tour operators.
“Hotelbeds is the global number one in the B2B accommodation wholesale space with operations in more than 120 source markets.
“Due to their different business models and strategies, Hotelbeds had been operated independently from the group’s tourism business in order to maximise the division’s growth and value."
Hotelbeds achieved total transaction value of €3.6 billion, turnover of more than €1 billion and underlying earnings [EBITDA] of €69 million in the year to September 2015.
Tui chief executive, Fritz Joussen, described the sale as a “very successful deal for the future of Hotelbeds as well as investors of Tui Group”.
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