CTM Finds European 'Anchor' With Chambers Acquisition, Expands In U.S. With D.C.'s Diplomat

Australia's Corporate Travel Management on Tuesday announced the acquisitions of U.K.-based Chambers Travel and Washington D.C.-based Diplomat Travel. The purchase of Chambers for A$43.7 million (US$36.9 million) represents CTM's first in Europe and gives the travel management company a desired foothold in the region. Meanwhile, the deal to acquire Diplomat Travel for A$8.9 million (US$7.5 million) represents CTM's third U.S. acquisition this year and follows one apiece in each of the prior two years.

CTM managing director Jamie Pherous recently toldThe Beat that the company was readying an acquisition in Europe.

In an investor presentation CTM indicated that the Chambers Travel deal "completes [its] strategic global footprint," and Pherous previously called Europe "the last key piece in the puzzle" to cap off CTM's presence in its "four corners," including its home markets of Australia and New Zealand, North America and Asia.

Chambers offers "an immediate and mature scalable presence in eight countries in Europe," according to CTM.

Based in London, Chambers brings to CTM operations in the Czech Republic, England, France, Germany, the Netherlands, Scotland, Sweden and Switzerland and "services clients in 10 European languages," according to CTM.

"For us, the point is always to find an anchor point first," Pherous recently told The Beat, "and once we've got that anchor point, we try to grow it both through winning new clients as well as acquisitions if we need to."

Chambers is a solid anchor for CTM. Based on their respective revenue profiles for the 12 months ending June 30, Chambers would have represented nearly 19 percent of CTM's worldwide revenue on a pro forma basis, according to figures published this week in a CTM investor presentation.

Chambers CEO Chris Thelen in a statement noted the CTM purchase would help "accelerate" its own growth ambitions, and that the two agencies already had worked together "on a number of global bids over the last 10 years." CTM noted that 60 percent of Chambers' clients are "global."

Chambers expects "to continue as a member of the GlobalStar network, with a view to developing a relationship with the whole CTM group."

Chambers has a 95 percent corporate mix and anticipates sales of approximately £135 million (US$211 million) for the year ending March 31, 2015. Chambers' staff of 214 employees "will retain their positions," according to the agency. Thelen agreed to be employed "as European CEO for a minimum three-year period," according to a CTM investor presentation.

Chambers indicated "no name change is planned for the foreseeable future."

Meanwhile, the purchase of Diplomat Travel gives CTM a presence on the East Coast of the United States. The deal follows a string of U.S. acquisitions, including this year's purchase of Alaska's USTravel and Houston-based Avia International Travel, 2013's acquisition of TravelCorp and the 2012 acquisition of Polk Majestic Travel Group (also known as R&A Travel). Those acquisitions have since rebranded under the CTM name.

Helmed by Australian native Denise Guida, Diplomat Travel's client mix is roughly 90 percent corporate, with this year's sales volume estimated at $45 million, according to CTM.

CTM in an investor presentation cited Diplomat's "expertise" in the government, non-governmental organization and security and defense segments, complementing CTM's "current government and marine/offshore niches" in the United States.

Following the acquisition, "CTM will now cover all major time zones in the U.S.A. and operate out of 18 cities across eight states," according to the TMC.

Once both acquisitions go into effect in early January, CTM will operate in four continents, 23 countries and 46 cities with a staff of more than 1,800.

Asked if the number of countries would grow further in the next 12 months, Pherous last month said, "I don't think that's going to change too much in a year's time," claiming opportunity to scale the business that has come under CTM's wing via acquisition and grab market share from the competition.