TUI Sells Hotelbeds to Cinven, CPPIB for $1.33 Billion
by James Shillinglaw /TUI Group has agreed to sell Hotelbeds to European private equity firm Cinven, which currently owns Amadeus, and the Canada Pension Plan Investment Board (CPPIB) for €1.165 billion ($1.33 billion). Hotelbeds is the largest independent business-to-business bedbank globally, offering hotel rooms to the travel industry from its inventory of 75,000 hotels in more than 180 countries.
Hotelbeds also provides transfers, excursions and tours, meetings and events, visa processing outsourcing, and cruise handling services. Its main clients are tour operators, travel agencies, corporate clients, and consumers. The Bedbank business, which generates most of the company’s profits, has seen double-digit growth in both its hotel portfolio and room nights over the past five years. Headquartered in Palma de Mallorca, Hotelbeds was established in 2001 and employs 6,150 people.
Cinven and CPPIB said they believe Hotelbeds is an attractive investment opportunity on the basis of strong financial performance, strong underlying market growth supported by an expected increase in global hotel bookings, and Hotelbeds’ experienced management team, led by CEO Joan Vilà. They also said they saw an opportunity to improve hotel-room distribution via travel agents and tour operators through an investment in Hotelbeds’ sales and contracting team, as well as in its R&D and IT systems.
Cinven has a strong track record in travel technology, with its investment in Amadeus, the travel technology solutions provider, which has invested €1 billion in R&D and doubled EBITDA during Cinven’s ownership.