Mayfair to explore exit, bolt-on options for Tour Partner Group

22 August 2019 - 03:37 pm UTC

by Min Ho and Amy-Jo Crowley in London

Mayfair Equity Partners is assessing options for portfolio company Tour Partner Group, including further bolt-on acquisitions or an exit next year, according to Daniel Sasaki, managing director at the sponsor.

Mayfair has yet to appoint an adviser to guide it on a potential sale of UK-based company, Sasaki said. There are “definitely” advisers already familiar with the business should Mayfair look for a divestment, he added, declining to elaborate further.

“We are starting to think about how to prepare that business for sale and we will be launching a process for that business …[at] the earliest next year,” he said.

The decision comes as Tour Partner Group, which creates group and individual tours to destinations in Europe, has grown to a EUR 100m-EUR 150m-revenue business from EUR 40m in 2015, when Mayfair first invested in it, he said.
The company's EBITDA is in the mid-teens, according to two sources familiar with the business.

Destination management companies like Tour Partner Group that offer customised tour packages can appeal to investors given the higher barriers to entry for new entrants, one of the sources said.

Financial sponsors with travel company experience that could look at the asset include Livingbridge, which last year invested in We Love Holidays and exited Key Travel, and Phoenix Equity Partners, which held Riviera Travel until 2017, the source said.

Other sponsors such as Equistone, which acquired Karavel-Promovacances & FRAM in 2018, and 3i Group, which invested in Audley Travel in 2015, could also look at the business, the source said.

Mayfair, which holds Tour Partner Group via 2015-vintage Fund 1, generally seeks to exit companies after four years, Sasaki said.

Earlier this month, it made its first Fund I exit, the sale of Fox International, a UK-based fishing products company, to US retailer Lew's Holdings.

The sponsor is looking to invest in a dozen companies via its second fund, which held its final close in January, as reported by this news service earlier this week.

Bolt-on opportunities

Mayfair created the business in 2015 with the acquisition of UK and Ireland inbound tour operator Hotels & More, later establishing Tour Partner Group as a holding company to accommodate further acquisitions in the space. These included Irish Welcome Tours and Trans Nordic Tours in 2017 as well as Experience Scotland in December 2018.

Under the Tour Partner Group umbrella the businesses can explore cross-sell opportunities among the sister companies that have greater expertise in their own markets, Sasaki said.

Mayfair could also opt to make further bolt-on acquisitions via Tour Partner Group before exiting it, as the sponsor sees continued growth potential in the travel sector, he said. The business is riding on the growing number of travelers willing to spend their disposable income on curated holidays, he added.

Tour Partner Group has an exposure to the growing number of Asian travelers interested in European destinations such as the Nordic countries, one of the sources said. The company could look at Asian targets for its next bolt-on to further expand its customer base in the region, this source added.

Recent deal activity in the space includes Japanese travel agency JTB Group’s acquisition of Kuoni Global Travel Services, a Switzerland-based destination management company from EQT in 2017. Foreign visitors to Europe will reach 620m by 2020, an increase of 150m compared to 2010, driven in part by Chinese and the other Asian travelers, JTB said in the deal announcement.

Tour Partner Group also has a presence in Germany, catering partly to the value-conscious market in the region, the other source said.

The company sells in more than 50 countries and has more than 25,000 tours arranged annually, according to its website.