HOW HAS THE TRAVEL INDUSTRY FARED IN M&A DEALS OVER THE LAST TWO YEARS?
Richard Martin: According to recent M&A articles on skift.com, Marriott is bullish on merger and acquisitions activity, as evidenced by its purchases of AC Hotels, Gaylord Hotels, Protea Hospitality Group, and Delta Hotels and Resorts in recent years. CEO Arne Sorenson said the quartet of acquisitions Marriott made over the last three to four years carried a price tag of $100 million to $200 million at multiples of up to 10 times EBITDA.
Looking at Merrill DataSite deal data, in the past 24 months we’ve seen a 31 percent increase in travel and hospitality data room projects in 2014 over 2013, the vast majority being M&A. Looking at projects coded for transportation from that same period, the growth was flat year over year.
Q. ARE PRIVATE EQUITY BUYERS INTERESTED IN TRAVEL TRADE DEALS?
RM: According to an article on ttgdigital.com, “The travel industry is likely to see continued interest from the private equity sector in 2015 as the appetite for investment remains strong.”
The article cites research from Catalyst Corporate Finance, which says there were 36 deals completed in 2014, a 24 percent increase over 2013. Private equity firms participated in 10 of the deals—compared with nine in 2013. While they remain in the minority, the prices involved tend to be high.
The travel sector is doing remarkably well and private equity investors have gone for it big time in 2015. […]
Richard A. Martin Jr. is a senior director at Merrill Corporation, responsible for Merrill DataSite’s global marketing group. Nearly two decades of marketing experience working and residing in the United States, the United Kingdom and Europe has developed Martin’s understanding of disparate corporate cultures and the global financial industry, evidenced by a successful record of growing businesses.