On the Beach Group Acquires Classic Collection

On the Beach Group has acquired Classic Collection Holidays for £20 million. Classic Collection reported EBITDA of £2.6 million and gross assets of £18 million, including property valued at some £2.5 million, in the year to October 2017.

As such, the board of On the Beach believes the acquisition will be earnings enhancing in the first full year of ownership, explained a statement.

Classic Collection dynamically packages luxury beach holidays and sells its packages through a network of third party offline travel agencies - including independent high street agents and homeworkers.

The acquisition represents a continuation of On the Beach’s strategy, while leveraging the group’s capabilities to access the circa five million short haul beach holidays that each year are booked offline. The group plans to invest to grow Classic Collection’s portfolio of luxury holidays.

The Package Travel Directivethat came into effect in July has meant that travel agents that dynamically package holidays take on onerous responsibilities that make it increasingly difficult for independent agents to do so cost-effectively.

For agents, Classic Online will provide many of the benefits of dynamically packaging themselves, but without the risks, as it will be the package organizer.

Both Classic and On the Beach are package organizers so the group already has the infrastructure in place to fulfil these responsibilities.

The total consideration will be made up of £14.6 million in cash on completion, £2.7 million cash which will be deferred for 12 months, following the completion, and £2.7 million in shares.