LONDON, April 8, 2002 (PRIMEZONE) -- lastminute.com plc (Nasdaq:LMIN), the online provider of travel and leisure solutions, today announces the purchase of a leading UK flights provider to consumers and travel agents, Travelselect.com Limited, for 9.0 million pounds, which will be satisfied by the issue (subject to listing) of 14,538,011 new shares in lastminute.com plc.
Highlights of the transaction:
- immediately earnings enhancing; - immediate positive contribution to operating cashflow; - further complements the delivery of operating profit in the UK business. lastminute.com has already announced that it is on track to deliver operating profit in its UK and French businesses in the April to June 2002 quarter; - creates cost synergies and additional gross profit. For the year to January 31, 2002 Travelselect.com generated 3.3 million pounds of gross margin; - triples lastminute.com's existing UK flights volume creating a UK flights revenue stream of approximately 50 million pounds; - facilitates access to a further 39 key airline relationships whilst deepening the relationships with existing suppliers; - transforms the current flight product to a similar breadth and scale as the existing lastminute.com hotel portfolio, enhancing a key component of the new dynamic packaging service to be launched during the second half of 2002; - provides online access to the Eurostar product.
Travelselect.com has over 19 years experience providing great value flight opportunities to both its business and consumer customer base and sells approximately 200,000 flight tickets annually. Sales are generated both on and off-line with a significant shift towards on-line sales during the past twelve months. Internet bookings generated exclusively on-line now account for some 80% of total transactions. Travelselect.com has negotiated fares with some 85 major airlines around the world including British Airways, Virgin Atlantic, Lufthansa, KLM and Air France.
Travelselect.com is now profitable and has grown sales by over 40% per annum for the past 3 years. The latest unaudited management accounts for Travelselect.com Limited, for the year to January 31, 2002, show turnover of 38.2 million pounds, gross profit of 3.3 million pounds and a loss before tax and goodwill amortization of 3.1 million pounds. Net assets at that date amounted to 0.8 million pounds including net cash of 2.7 million pounds, but after excluding 8.7 pounds million of intangible assets. Travelselect.com's current UK operation comprises 87 full-time employees based in London.
Vimal Khosla, majority shareholder and Chief Executive of Travelselect.com Limited, will join the lastminute.com plc Board as an Executive Director with effect from today.
In addition to the initial consideration, lastminute.com will pay further consideration depending on the EBITDA achieved for the year to January 31, 2003. The additional consideration has been capped to a maximum payment of 3 million pounds and may be satisfied either in new shares or in loan notes, at the option of lastminute.com plc.
Of the 14,538,011 new shares in lastminute.com plc to be issued as initial consideration, 89% are subject to lock-up provisions for 12 months from completion (subject to certain limited exceptions).
Application has been made to the UK Listing Authority and to the London Stock Exchange for the shares to be admitted to the Official List and to trading on the London Stock Exchange's market for listed securities. It is expected that admission to the Official List and trading on the London Stock Exchange's market for listed securities will become effective at 8 a.m. on April 8, 2002 and dealings will commence at that time.
Allan Leighton, Chairman of lastminute.com said: "This is lastminute.com's first acquisition of scale in the UK. The travel volume and expertise Travelselect.com brings will further enhance the delivery of our key metrics as we continue to lead the business beyond operating profit at a country level."
Brent Hoberman, Chief Executive of lastminute.com said: "lastminute.com and Travelselect.com are highly complementary. Travelselect.com adds substantially to the range and scale of lastminute.com's flights business, and this will be particularly important when we introduce dynamic packaging later this year, enabling customers to create their own flight and hotel packages."
Vimal Khosla, Chief Executive of Travelselect.com Limited said: "We are delighted to become part of such an exciting and progressive business. The joining of lastminute.com offers great opportunity to grow the flights area of the combined businesses dramatically. There is significant potential to enhance the product range to our travel agent customers through the Globepost brand."
Notes to Editors
About lastminute.com
Based on the idea of matching supply and demand, lastminute.com offers consumers last minute opportunities to acquire airline tickets, hotel rooms, package holidays, entertainment tickets, restaurant reservations and delivery, speciality services, gifts and auctions in the UK, France, Germany, Italy, Sweden, Spain, The Netherlands, Australia and South Africa.
In October 2000, lastminute.com acquired the Degriftour Group, one of France's leading e-travel groups. At December 31, 2001, lastminute.com had over 4.6 million subscribers to its weekly newsletter and had established approximately 10,100 supplier relationships, with companies such as Lufthansa, Air France, Alitalia, bmi british midland, United Airlines, Virgin Atlantic Airways, Starwood Hotels and Resorts Worldwide, Kempinski Hotels, Sol Meliae, Six Continents, JMC, Disneyland Paris, English National Ballet, The Royal Albert Hall, Conran Restaurants and The Way Ahead Box Office.
lastminute.com is the most visited website in the travel and tourism category across Europe according to a survey published in December 2001 by independent research company NetValue.
About Travelselect.com Limited
Travelselect.com has grown out of GP, an established airline consolidator with over 19 years industry experience. Travelselect.com was the first transactional website in the UK to successfully merge negotiated and published fares and has since grown sales by over 40% per annum. It has now become the 6th most visited travel web site in the UK in January 2002 according to NetValue.
Travelselect.com developed technology for the travel industry in-house for over 10 years. This has enabled it to offer technological solutions to its travel agent base as well as providing key licensing opportunities within the UK and overseas.
Travelselect.com has always benefited from close cooperation with its travel industry partners and has established relationships with over 85 airlines, Eurostar, and hotel providers.