Corporate Travel Management landed its first U.S. travel agency acquisition in well over three years when in the closing days of December it inked a deal to acquire Texas-based Corporate Travel Planners, effective Jan. 1.
Publicly listed in Australia, CTM purchased CTP for an "initial consideration" of $18 million, 10 percent of which was covered in stock and 90 percent in cash. In addition, "a further maximum contingent consideration of $18 million" is on the table to the seller, "subject to achievement of future profit hurdles," according to a Dec. 24 CTM investor disclosure.
Based in San Antonio, Corporate Travel Planners focuses on the university and education sector, an intriguing new vertical for CTM.
CTM said it was attracted to CTP's expertise in the "specialized niche" and expects CTP to help CTM "expand market share into the university and education sector in North America," according to its investor notice. CTM viewed the sector as less exposed to economic downturns than the corporate sector.
CTM also said CTP helps lift CTM's annual transaction volume in the U.S. to more than $1.5 billion.
Christy Prescott founded CTP in 1991 as "a one-location San Antonio venture," according to CTP's website, which claims that CTP grew into "one of the largest women-owned full-service travel management companies in Texas and among the top 50 in the nation." Prescott will stay on. CTM disclosed to investors that she "will own [CTM] stock and has entered into an employment contract bringing to CTM her knowledge, reputation and expertise in the university and education sector."
While CTM has grown in the U.S. through mergers and acquisitions in the past decade, its pace of such buying has slowed. CTM entered the U.S. in 2012 with the acquisition of Polk Majestic Travel, which was followed by a flurry of others: TravelCorp in 2013 and Alaska's USTravel, Houston-based Avia International Travel and D.C.-area Diplomat Travel in 2014.
Yet, CTM's buying spree in the U.S. had hit a nearly four-year lull, its most recent U.S. acquisition until now being Boston-area Travizon in 2016, quick on the heels of California's Montrose Travel.
CTM also has moved on Europe with several U.K.-based acquisitions, including Chambers Travel Group and Redfern Travel.
CTM last year flirted with an acquisition of U.K.-based Capita Travel and Events, which never materialized.
Asked about that deal and the M&A environment in an August 2019 investor call, CTM managing director Jamie Pherous said: "We've got a strategy and we're going to execute to that strategy. The reality is that we're very fussy. We're fussy on valuation and fussy on outcomes. And I think, across the board, valuations got a bit ahead of themselves, but I think that's turned on the dime at the moment."