World Travel Buys Deckchair.com
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[London, ENGLAND] Once valued at nearly US $30 million, Sir Bob Geldof's online travel business Deckchair.com has been acquired by World Travel Holdings for just US $4.5 million plus a future, performance-related payment of up to US $8.4 million.
Rock musician Geldof, famed for his Live Aid work, has not been as successful online as many people expected. Into the venture he invested some of the US $10 million raised from the sale of his television production house Planet 24 to Carlton Communications.
"Irritation is usually the spur for me to do something, that's why I created deckchair.com," Geldof says on the site.
No doubt that is why he sold it, having made a quarter of the 51 staff redundant last month.
The high-profile Geldof has consistently made headlines for his online business and succeeded in capturing plenty of visitors to the site. Deckchair claims to have a quarter of a million customers for its online travel booking service.
Cardiff-based World Travel Holdings, which says it will retain the deckchair.com brand, has concentrated on developing its technology but has been relatively unsuccessful in attracting customers. It floated on the Alternative Investment Market in May last year and posted a pre-tax loss of US $9.7 million for 2000.
Analysts may feel that deckchair.com needs the support of a profitable company, rather than one which has seen losses deepen over the past twelve months. The fact is, the European online travel market does not offer too many opportunities for mergers, and World Travel represented one of deckchair.com's few opportunities for merger.
World Travel will pay for the acquisition in shares, loan notes, and options.
Etienne de Villiers and Clive Dolman, both members of the deckchair.com board, will join the board of World Travel, along with Bob Geldof himself. It is probable that World Travel's board meetings will be considerably more lively than ever before, especially if the collective balance sheet does not improve.
As well as its online ticketing business, Deckchair owns high street travel agency Soho Travel and the travel information site Kasbah.com.