LONDON, June 13, 2002 (PRIMEZONE) -- lastminute.com plc today announced the purchase of The Destination Holdings Group Limited (DGL), a leading online travel provider of flights, own label package holidays and car hire for 12.0 million pounds. The consideration will be satisfied by a vendor placing to raise 8.0 million pounds and the issue of 4,835,298 new shares in lastminute.com plc.
Highlights of the transaction:
-- significantly earnings enhancing in the first full year after acquisition -- immediate positive contribution to operating cashflow. At April 30 2002 DGL's net cash and investments amounted to 8.2 million pounds -- creates the opportunity for further cost synergies supplementing the recent Travelselect acquisition and growth in gross margins -- strengthens the lastminute.com product portfolio by providing tailormade holiday solutions for clients for both longhaul destinations and city breaks -- cements the relationships with key airline and hotel suppliers.
DGL has over 16 years experience in providing travel solutions for clients. Sales are generated both on and offline. The proportion of bookings now generated online is approximately 75% of total bookings. The Group trades under the travel4less brand online, with twenty four individually branded sites for each travel product or destination.
DGL has seen sales grow from 8.1 million pounds in the year to April 30, 1995 to 28.3 million pounds in the year to April 30, 2001. Audited profit before tax (after adjusting for directors bonuses and other non trading items) in the year to April 30, 2001 was 1.1 million pounds. The latest unaudited management accounts for DGL for the year to April 30, 2002 show revenues of 38.8 million poundsgenerating a gross margin in excess of 15% and a profit before taxation of 1.4 million pounds on the same basis. Unaudited net assets at April 30, 2002 amounted to 0.5 million pounds (2001 audited: 0.4 million pounds), including net cash and investments of 8.2 million pounds. DGL currently employs 119 full time staff based in London.
Raj Kumar, the joint majority shareholder and Group Managing Director of DGL will join the Executive Committee of lastminute.com with effect from completion.
In addition to the initial consideration, lastminute.com will pay a maximum deferred amount of 3 million pounds, dependent upon the results of DGL for the year ending April 30, 2003. The deferred consideration may be satisfied either in new shares or cash, at the option of lastminute.com.
The 4,835,298 new shares in lastminute.com plc to be issued as initial consideration are subject to lockup provisions for 12 months from completion.
Current trading
lastminute.com continues to trade in line with expectations for the seasonally stronger second half of the financial year. The Group remains confident of continuing business growth and moving further towards overall Group profitability and positive operating cashflow.
Details of the vendor placing
lastminute.com plc proposes to raise 8.0 million pounds, after expenses, by way of a vendor placing of 9,638,555 new lastminute.com plc shares priced at 0.83 pounds per share. The new shares will rank pari passu in all respects with the existing shares.
Application has been made to the U.K. Listing Authority and to The London Stock Exchange for all the new shares to be admitted to the Official List and to trading on The London Stock Exchange's market for listed securities ("Admission"). It is expected that Admission will become effective from 8:00 a.m. on June 18, 2002 and dealings will commence at that time.
The acquisition and vendor placing are conditional, inter alia, upon Admission occurring by 10:00 a.m. on June 21, 2002 (or such later time and/or date as Cazenove and the company may agree).
lastminute.com was advised by Cazenove & Co. Ltd in connection with the vendor placing.
Allan Leighton, Chairman of lastminute.com said: "The acquisition of The Destination Group provides access to excellent and exclusive high margin product, ideally suited to the lastminute.com customer base."
Brent Hoberman, Chief Executive of lastminute.com said: "Raj Kumar and his team have built a great business operating principally in the online travel sector. I am delighted to welcome them to the lastminute.com group and to acquire such an earnings enhancing company which furthers the scale of the U.K. business."
Raj Kumar, Group Managing Director of The Destination Group Limited said: "To become part of such a dynamic and forward thinking Group is tremendously exciting and offers us the economies of scale and global distribution we need to grow the business dramatically and strengthen both brands in an increasingly competitive marketplace. The move towards dynamic packaging will ensure that we become the integrated online tour operator of choice for the discerning client."
Enquiries:
High resolution photographs will be available to media at www.vismedia.co.uk
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 U.K., France, Germany, Italy, Sweden, Spain, The Netherlands, Australia and South Africa. In January 2002 lastminute.com announced the completion of a Japanese Joint venture with the site due to go live later the same year.
On June 10, 2002 lastminute.com announced a strategic investment and partnership in Germany with LCC24, the online vehicle for Lufthansa City Center.
At March 31, 2002, lastminute.com had over 5 million subscribers to its weekly newsletter and had established approximately 10,700 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 Melia, Six Continents, JMC, Disneyland Paris, English National Ballet, The Royal Albert Hall, Conran Restaurants and The Way Ahead Box Office.
lastminute.com remains the No 1 independent European travel site across nine countries (NetValue March 2002).
About The Destination Holdings Group Limited
The Destination Holdings Group (DGL) is a direct sell worldwide tour operator and airline consolidator offering tailormade holidays, discounted flights and independent travel arrangements. Having developed over 2500 preferred direct supplier relationships with leading airlines, hotel chains, car rental companies and independent sightseeing and tour providers. DGL offers clients considerable discounts on their Independent Traveller or Package holidays.
Travel4Less, the online division of DGL has chosen a different approach to other traditional online travel portal offerings. It has developed a series of web sites dedicated to either the type of travel product or destination featured, rather than trying to manage and display all products on a single site.
Flights4less Carhire4less Holidays4less SouthAfricaholidays4less; Dubaiholidays4less etc Citybreaks4less Praguehotels4less; Parishotels4less etc.
In 2001, to further strengthen its specialist tour operating abilities in Eastern Europe, DGL acquired Danube Travel, a specialist provider of tailormade holidays to Prague and Budapest.
Travel4Less remains committed to expanding its specialist tour operating products and offering them online to the discerning client.