Flight Centre is buying the Irish company Travelonomy Limited which owns the US-based StudentUniverse.com group of companies specialising in student and youth travel.
The Australian travel booking company will pay USD 28 million (AUD 39 million). The deal, which includes more payments if StudentUniverse.com achieves profit milestones in 2016, has been recommended by Travelonomy’s board of directors.
Flight Centre, which is on a run of record sales and strong profit results, says it wants to develop or acquire other online businesses.
The latest buy, StudentUniverse.com, has a strong technology platform and is a leading online travel booking service for the student and youth sector. The Boston-based business offers special student air fares via its websites and mobile apps.
Graham Turner, Flight Centre co-founder and managing director, says the acquisition will enhance the company’s stable of youth businesses, including the Student Flights leisure travel brand, tour operator Top Deck and the gapyear.com social networking site.
“This represents a unique opportunity to secure a profitable travel technology company with proven e-commerce solutions and a highly experienced and talented leadership team that has built a strong brand presence,” Turner says.
He sees solid future growth potential in the rapidly growing youth sector estimated to be worth more than USD 180 billion a year.
“We are also looking to develop or acquire other online businesses to ensure we continue to meet the needs of travellers who prefer to book via the web,” he says.
Flight Centre intends to use StudentUniverse.com’s expertise in technology and digital marketing to enhance operations in the US and elsewhere.
StudentUniverse.com employs 160 people and is the number one student travel brand in all search engines in the US.
The business is expected to generate more than USD 250 million in turnover during the 2015 calendar year.
It has an online sales presence in Canada and a team in the UK, plus support operations in the Philippines, but generates the bulk of its sales in flights booked from its home market service in the US.
Source: Business Insider