10 May 2017
On the Beach Group plc
("On the Beach" or the "Group")
Acquisition of Sunshine.co.uk Limited
On the Beach Group plc (LSE: OTB.), a leading UK online retailer for beach holidays, today announces that its subsidiary On the Beach Travel Ltd has agreed to acquire the entire issued share capital of Sunshine.co.uk Limited, an online travel agent based in the UK ("Sunshine"), for a total consideration of £12.0m (on a cash free debt free basis).
The consideration will be funded from the Group's existing cash resources and bank facilities in the form of an extension to the Group's existing working capital revolving credit facility with Lloyds Bank plc. The consideration will be split with 75% paid on completion and the remaining 25% in December. The Board confirms that this transaction will not impact the Group's ability to pay dividends in line with its stated policy.
Sunshine reported gross assets of £18.6m and EBITDA of £1.6m in its latest statutory audited accounts for the thirteen month period to 30 September 2016. Sunshine is highly complementary to On the Beach and the transaction will add circa 200,000 customers to the 1.2m customers currently travelling with On the Beach to our focused range of hotels in key beach destinations. The additional passenger volumes will significantly enhance OTB's opportunity to drive an increasing proportion of business into exclusively contracted product and an ability to leverage incremental margin.
The Board believes that the acquisition will be earnings enhancing in the current financial year to 30 September 2017 because of the Group's ability to quickly leverage its modular technology platform to deliver a market leading customer proposition, access directly sourced, higher margin product and deliver proprietary personalisation and bid management technology. The acquisition will accelerate On the Beach's growth and the compelling economic benefits of scale will create short to medium term synergies and further margin opportunity.
Simon Cooper, Chief Executive of On the Beach Group plc, commented:
"We are delighted to have acquired a brand as well-established with beach holidaymakers as sunshine.co.uk. This earnings enhancing transaction reflects the Board's ambition to consolidate On the Beach's leading position in the online beach holiday space while supporting our drive to exclusivity and underpinning our ability to further leverage our scale."
This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation.
For further information:
On the Beach Group plc Simon Cooper, Chief Executive Officer Paul Meehan, Chief Financial Officer |
c/o FTI Consulting |
FTI Consulting Jonathon Brill Alex Beagley |
Tel: +44 (0)20 3727 1000 |
About On the Beach
On the Beach is one of the UK's largest online retailers of beach holidays with a 20% share of the online short haul beach holiday market. The Group has a large opportunity to generate further growth and has a vision to become Europe's leading online retailer of beach holidays. On the Beach provides a significant structural challenge to legacy tour operators and travel agents as the Group continues its journey to disrupt the online retail of beach holidays with its scalable, flexible, innovative technology, combined with a strong customer value proposition and a low cost base. The business model is customer-centric, asset light, profitable and cash generative.
www.onthebeachgroupplc.com
