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JBR advices Corendon in the acquisition by Swedish Triton

4 June 2019

The private equity group behind tour operator Sunweb has acquired Corendon, a Dutch tour operator with revenues of approximately €520 million. The deal – which concludes for an undisclosed fee – will see Corendon merged into Sunweb.

In December 2018, Sweden’s Triton Partners acquired a majority stake in Sunweb, which serves around one million customers annually through its Sunweb, Jiba, GOGO, Husk, Eliza was Here and X-Travel labels. The firms jointly provide packaged holidays to more than 20 destinations across Europe and the Mediterranean. Now, with the addition of Corendon, the new Sunweb combination will be a top three leisure tour holiday operator in the Benelux region.

It was shortly after purchasing Sunweb that Triton Partners first contacted the founders of Corendon, Atilay Uslu and Yildiray Karaer. For a long time, the pair had resisted the lure of losing their independence. However, according to Uslu, “this deal was simply too good to decline.” Speaking to Dutch newspaper Algemeen Dagblad, he said, “With this deal we secure the future of Corendon… Sunweb and Corendon form a dream combination.”

Steven van der Heijden, the Chief Executive of Corendon, meanwhile described the deal as “a natural and logical next step.” Ultimately, it is a step which will see Corendon’s Dutch and Belgian tour operations (Corendon, Karin’s Choice, Maris Life, Stip Reizen and GOfun) and Dutch airline business transfer to Triton Partners, while founders Uslu and Karaer maintain a minority share in the firm, and Uslu takes a seat in the firm’s non-executive board as a strategic advisor. The hotels and the airlines in Turkey and Malta have been excluded from the transaction – the businesses remain under the ownership of the two Turkish-origin entrepreneurs.Uslu and Karaer initially launched Corendon in 2000 as a travel agency, with a focus on holidays in Turkey. In 2005 the company kick-started its strategy to becoming a full-service operator by adding an airline to its portfolio (Turkey), and in the years that followed Corendon launched airlines in the Netherlands and Malta. Meanwhile, the company also become a hotel operator, opening dozens of hotels in Turkey, the Netherlands, Ibiza and Curacao. Last year, Corendon supported the holidays of more than 750,000 people in the Benelux.

A larger muscle

Remembering the first encounter with Triton Partners, Ursu said, “They came to Amsterdam, and we met in one the Corendon hotels. It was love at first sight, there was an immediate click.”

Soon after, Corendon assembled a deal team to pursue the transaction, led by merger & acquisition advisors from JBR (a Dutch consulting firm member of the Global M&A Partners network) and M&A lawyers from a renowned law firm. At Corendon, the so-called closing period kicked-off yesterday. In the coming months the deal’s nature and impact will be looked at closely by Europe’s antitrust authorities in Brussels, with final closing planned for the third quarter of 2019.

With revenues of €19 billion and €10 billion respectively, Germany’s TUI and UK’s Thomas Cook are the runaway market leaders in the leisure holidays market. Specifically in the Netherlands, TUI is currently roughly four times the size of Corendon in turnover. However, the new a €1+ billion Sunweb – Corendon group will be able to make a much stronger stand against the two much larger tour operators.

The joining of forces will also allow the two companies to consolidate their capacity in key destinations, such as Turkey and Greece. This is important in an industry characterised by high demand volatility and low-margin business – having the scale and flexibility to capitalise on holiday trends while running efficiently is paramount for profitable operations. While large mergers are known to come with challenges, Uslu insisted that he is confident that the integration will on the back of large similarities run smoothly.

“This deal was simply too good to decline…. Sunweb and Corendon form a dream combination.”

He explained, “We are both online driven, customer-oriented and have a clear price-quality strategy. We are both strong in the field of sun vacations and our major destinations complement each other.” He also stressed that the deal will have no impact on customers and employees, “On the contrary, this gives our people expanded opportunities. The head office will remain in Amsterdam and there will be no layoffs.”

Meanwhile, Per Agebäck from Triton pointed to the synergies that will flow out of the bundling. First, while Sunweb is strong in the winter sports landscape, it doesn’t have an own airline, which Corendon has. Second, the ramped up financial muscle will mean that the two companies will have a “stronger platform for new investments, innovation and accelerated digitisation.”

Innovation in travel

The need for investing in innovation and modern business models is demonstrated by recent developments at Thomas Cook. Britain’s oldest package holiday operator is struggling financially amid fierce online competition. Following a string of profit warnings, the company has seen an 80% drop in its share price over the past year. The company is now undergoing a strategic reorientation, implementing a restructuring plan (overseen by AlixPartners) and considering several merger & acquisition options.

Reports in the Financial Times suggest that the company may be split up, with several bids coming in for its tour operator division (allegedly Triton also has interest), a move which would provide Thomas Cook the room to turn its focus on increasing investment in directly owned hotels, a business line which is generally more profitable.

Travel organization Corendon is acquired by the Scandinavian investor Triton, already majority owner of  Sunweb.

The deal will transfer the Dutch and Belgian tour operations from Corendon (Corendon, Karin’s Choice, Maris Life, Stip Reizen and GOfun) and the Dutch aviation operations to Triton Partners.

Onno Sloterdijk, associate at JBR Corporate Finance and Luuk Bruna, partner at Seasons Capital Partners, assisted Corendon during this transaction.

Read the article on Consultancy.nl