Leading Australian travel company Intrepid Travel will form a strategic venture with British group, TUI Travel PLC, in a deal that will see Intrepid boss Darrel Wade take control of a portfolio of 20 travel businesses with $400 million in annual revenue.
The unusual deal, announced this morning, is part takeover, part investment and part sale.
Wade and Intrepid co-founder Geoff Manchester will hold shares in a new company, PEAK Adventures, alongside TUI. The British company will then tip a swag of brands it owns in the adventure travel space into the PEAK vehicle.
While Wade and Manchester are essentially selling their business into the PEAK vehicle, they are also involved in something of a major acquisition, given that TUI’s brands will now be managed by members of the Intrepid management team.
Manchester told SmartCompany this morning that he and Wade had been considering options to expand the business – including bringing on a new investor – for about 12 months.
“We’ve always kept an open mind as to what our next move would be,” he says.
“TUI has always been very interested in Intrepid Travel as a business, but we spurned their advances in the past because they want to buy us outright.”
He says the idea to set up an independent company was a “creative” solution to the problem.
Initially at least, PEAK will act as a management group that will service all the brands and work to extract cost savings from the increased sale of the group. It is expected these cost savings will amount to $17 million over the first three years.
The brands will remain separate, and will continue to compete against each other. However, Manchester says the deal will be good for Australian customers.
“Our Intrepid customers won’t notice a difference, but customers in the adventure and experiential travel will notice a difference because over time we will introduce products that aren’t in the Australian market. “
Manchester says the new structure will present challenges for he and Wade, and the Intrepid management team.
“For Darrell and I, I guess the big change is that we a loosening our grip a bit over Intrepid.
“There are new challenges for the management team in that it is a much broader business, but I think that the managing directors of each of the brands are very much behind what we are doing and I think that will make that much easier.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
