ebookers.com Takes Over Its Own Parent Company
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[London, ENGLAND] European online travel company ebookers.com announced Thursday the "completion" of its acquisition of Flightbookers plc, the 17-year-old travel agency that originally gave birth to the online venture.
As specified in the acquisition terms, ebookers.com is paying 50 percent of the US $15 million consideration immediately in new ebookers.com shares. It will pay the remaining 50 percent within two years, in shares or cash -- when the deal, surely, will be complete.
It is not often that an online venture is able to acquire a long-established parent company. The acquisition seems to go against the trend, reportedly identified by the chairman of USA Network Inc. this week, that 99 percent of all Internet business ventures will "go up in one kind of smoke or another" in the coming years.
A substantial business, Flightbookers plc is one of the UK's largest independent travel agents that offers its customers over 1.2 million discounted fares with the world's leading airlines. Licensed by the International Air Transport Association (IATA) and the Civil Aviation Authority (CAA), it has retail outlets in London's West End and on the concourse at Gatwick Airport.
By acquiring Flightbookers, ebookers.com achieves its aim of owning in-house fulfilment operations in all of its 11 operating countries. In addition, the deal secures ebookers.com's long-term access to negotiated air fares -- one of the keys to running a successful online travel service.
With its customer base of 0.22 million, Flightbookers will increase the revenues of the online company. Although ebookers.com says it has no intention of raising any more funds for expansion, it does not have a positive cash-flow at this stage of its development.
Although it has many features of the typical dotcom enterprise, ebookers.com can now at least claim to be firmly anchored in the "real world" of travel retailing.