Redfern Travel — Acquisition by Corporate Travel Management (CTM)
Bradford-based corporate and government travel management company with a highly automated proprietary booking platform, acquired by Corporate Travel Management, illustrating how proprietary technology, automation and strong corporate client relationships can support travel agency valuations.
Acquirer
Corporate Travel Management (CTM)
Year
2017
Enterprise Value
£40.0m
Revenue
~£310m (Transaction Value)
Adjusted EBITDA
£9.0m
EBITDA Multiple
4.5×
Industry
Travel Agency
Transaction
Corporate Travel Management acquired UK-based Redfern Travel in 2017 as part of its expansion in the UK and European corporate travel market. Redfern was a Bradford-based travel management company specialising in corporate and government travel, with a highly automated proprietary booking platform processing more than 95% of transactions online. CTM announced initial consideration of £40.0m, representing approximately 4.5× forecast FY2017 EBITDA. Redfern was expected to generate approximately £9.0m of EBITDA for the twelve months ending March 2017. The transaction also included performance-based consideration, with total consideration potentially increasing to £50m subject to profit hurdles.
Why the Premium?
- Proprietary highly automated integrated travel platform
- High operating scalability (~110 employees)
- Strong corporate and UK government client base
- Total transaction value growth of ~13% CAGR over three years
- Strong historical client and employee retention
- Strategic fit with CTM's wider European operations
SME Takeaway
At 4.5× forecast EBITDA, the transaction demonstrates the type of multiple achieved by a travel business with strong corporate clients, proprietary technology, high levels of automation and an established management team. For smaller travel agencies, the transaction highlights the potential valuation importance of recurring corporate relationships, customer retention, automation, scalable systems and reduced dependence on individual owners. Redfern was substantially larger and more technology-driven than a typical independent leisure travel agency, so the transaction should not be viewed as directly comparable to every SME travel business. However, its 4.5× EBITDA multiple provides a useful real-world reference point for a well-established travel agency or travel management company.
Sources
Disclaimer: Case study figures are based on publicly available information and are provided for illustrative purposes only. Transaction values, EBITDA figures and implied multiples may reflect different reporting periods, definitions and deal structures, and some multiples are calculated from disclosed figures rather than reported by the parties. They are not formal valuations, investment advice or a substitute for independent professional advice.