Australian company Flight Centre Ltd. has acquired Liberty Travel and Gogo Worldwide Vacations. The sale, valued at $135 million, should close by early 2008. At that time, Liberty Travel and Gogo will become part of 17 other U.S.-based retail, wholesale and corporate divisions owned by Flight Centre.
The acquisition gives Flight Centre a strong presence in North America. adding 193 leisure travel storefronts along the East Coast and in Florida and Chicago, as well as 40 wholesale locations in 22 states. The combined companies are expected to produce annual revenues of $2 billion, making the business the tenth largest travel group in the United States and the second largest brick-and-mortar leisure agency, after AAA Travel.
Acquisition talks have been happening for a while, said Michelle Kassner, president of Gogo Worldwide Vacations, who noted that there are several advantages for both Liberty and Gogo. "It benefits our business to be purchased by a large and powerful partner," Kassner said. "Flight Centre has a very similar corporate culture to ours and a very similar business model, plus their counselors will be booking our product."
Added Cathy Pelaez, currently COO of Liberty Travel: "Flight Centre has a large presence in Canada, plus retail shops in the U.K. and some here in the U.S., in Los Angeles and Chicago, so we're excited by the fact that those locations will become Liberty Travel-branded agencies," said Pelaez.
Which is an important fact to note: Given the strength of both companies, both will retain their brands. "For us to continue to exist is important," said Pelaez. "Flight Centre is very focused on growing our brands, so that is an exciting change that we're looking forward to, as well as increasing the number of vacations and increasing the customer base."
Liberty Travel will be managed as part of Flight Centre's North American business, which is headed by Greg Dixon. Flight Centre's Sue Rennick and Liberty Travel's Pelaez will lead the integration team, which will make decisions on everything from IT to finance. Through the integration, which should take about a year, it will be business as usual for all suppliers and Liberty and Gogo agents, Pelaez said.
Pelaez, currently COO of the company, will transition to president of Liberty Travel. It was reported that other key Liberty executives would remain in their posts.
In a statement, Flight Centre's Managing Director, Graham Turner, explained Flight Centre's reasoning behind the acquisition. "Firstly, access to Gogo's wholesale product range, particularly its core Caribbean and Americas offerings, will strengthen Flight Centre's global product platform, which is a key strategic objective for the company," he said. "Secondly, Flight Centre will now have an iconic and profitable leisure travel business in the USA to complement its successful and rapidly expanding Fcm Travel Solutions corporate travel business." (JM)