The acquisition of Sunshine.co.uk by On the Beach marks a significant move in the online travel agency sector. The deal, valued at £12 million, is set to expand On the Beach’s customer base considerably.
In a strategic acquisition, On the Beach has purchased rival online travel agency Sunshine.co.uk for £12 million. This acquisition aims to enhance On the Beach’s market position by adding Sunshine.co.uk’s established customer base to its own, consequently increasing its total number of customers to approximately 1.4 million.
Simon Cooper, the chief executive and founder of On the Beach Group, expressed excitement over the acquisition. He highlighted that Sunshine.co.uk is a well-established brand among beach holidaymakers. The transaction is expected to boost earnings and aligns with the company’s ambition to strengthen its leading position in the online beach holiday market.
The acquisition will be funded through existing cash resources and bank facilities. Specifically, On the Beach plans to extend its working capital revolving credit facility with Lloyds Bank to accommodate this purchase.
Sunshine.co.uk reported gross assets of £18.6 million for the 13-month period ending September 30, 2016, along with an EBITDA of £1.6 million. The financial health of Sunshine.co.uk underscores the strategic nature of the acquisition.
Three-quarters of the £12 million payment will be made upon completion of the deal.
The remaining 25 percent of the payment is scheduled for December. This staged payment structure indicates a careful financial strategy by On the Beach to manage its resources.
On the Beach is headquartered in Cheadle and currently serves about 1.2 million customers. The firm has consistently worked towards consolidating its market presence.
By acquiring Sunshine.co.uk, On the Beach aims to leverage brand strength and customer loyalty, essential elements in the competitive travel industry.
The acquisition reflects a broader trend of consolidation within the online travel sector. Larger companies are increasingly looking to absorb smaller ones to enhance their market position and customer reach.
Such moves not only increase scale but also contribute to more personalised holiday experiences for consumers.
This deal occurs during a period of escalating competition among online travel agencies, where exclusive offerings are becoming pivotal.
On the Beach’s focus on exclusivity and leveraging scale could position it advantageously amidst this competitive landscape.
On the Beach’s acquisition of Sunshine.co.uk signifies a forward-thinking approach towards market dominance. The company is set to build upon this newly expanded customer base by offering more tailored and exclusive travel deals.
In summary, the strategic acquisition of Sunshine.co.uk by On the Beach not only enhances its market power but also demonstrates a keen focus on growth and customer satisfaction. This move undoubtedly positions On the Beach as a formidable player in the online travel industry.