Efforts by some board members of the National Business Travel Association and the Association of Corporate Travel Executives to merge the two organizations during the past few months nearly paid off before failing to gain the approval of the required two-thirds of ACTE's board of directors earlier this month, stopping any tie-up for the time being.
(Editor's Note: Please click here for a June 22 update to this story, covering the resignation of ACTE president Doug Weeks.)The NBTA board of directors, however, on June 18 voted unanimously to continue to pursue the merger discussions that began in Dallas in early April, when ACTE president Doug Weeks and treasurer-elect Mary Ellen George met with NBTA president and CEO Kevin Maguire and NBTA Allied Leadership Council president Scott Solombrino. Through the course of almost weekly meetings spanning about two months, the association leaders slowly widened the discussion circle to include other members of each association's boards.
The resulting agreement called for maintaining the ACTE name in some form for two years, allotting ACTE five three-year board appointments—two supplier members and three buyers—until a formal election and creating a new board of the newly merged entity with three board members from regions outside the United States.
"They have such a strong international presence that they wanted to be fair to those groups," said Maguire. The draft agreement also called for the creation of the International Leadership Council, comprising elected leaders to represent international members. Solombrino said the council would resemble the Allied Leadership Council as "an advisory council helping to make policy on a global level and helping to participate in the educational format that we would set up globally outside of the United States."
Sources said some resistance to the merger came from ACTE's international leaders, even though international consolidation was one of the areas in which NBTA felt the merger could benefit the organizations the most. "It definitely would have been helpful to increase our critical mass from an international basis pretty quickly," Solombrino said. "They also have a number of people on the ground internationally that we were very attracted to from a staff perspective. NBTA has a limited staff on a global basis and doesn't have the same infrastructure yet on the international side because everything is pretty centric to Washington. They had some people that we thought would be helpful in expanding our global presence pretty quickly, and they have some excellent employees that we all agreed should be part of the deal."
The proposed agreement also called for the new entity's board to appoint a new executive director, effectively replacing NBTA executive director and COO Bill Connors, who is leaving to become president and CEO of the Metro Boise Chamber of Commerce, and ACTE executive director Susan Gurley. "On our side, it became a non-issue because Bill Connors accepted a position at another organization, but in the discussion with ACTE we decided it would probably be a good idea to review whether either executive director would remain," Maguire said. The negotiators unanimously "decided it would probably be best to solicit the services of a new executive director in the new organization and that we would all have some input in looking at the final process of determining that individual."
The agreement also called for NBTA to assume some of ACTE's post-merger expenses , including buyouts of management and other labor contracts, ACTE's office lease, which expires next year, and "ACTE supplier expectations" on signed deals for advertising or sponsorships. NBTA planned to set aside $250,000 for "things that might pop up in the due diligence that no one was aware of," said Solombrino.
"As in any deal, there are always extra add-ons financially, but we basically thought we could do the merger in a financial frame of somewhere under a half-million dollars with everything combined," said Solombrino. "We didn't think that was unreasonable considering what we had."
While the two organizations had discussed such a merger many times previously, the current economic reality appears to have made this most recent effort more substantial than prior discussions, particularly as some supplier sponsors sought relief from the expense of supporting both organizations.
Said Maguire, "The supporters—which is really our allied base on both sides—said, 'Look, people, the economy does not allow us to continue to give money at the rate we're giving it and at the level we're giving it at each organization. Please find a way to make this work.' "
NBTA said its June 18 vote to continue its attempts to merge with ACTE took place during the board's regularly scheduled quarterly meeting, during which the board "supported the outline of a potential structure for a merger process previously drafted with members of the ACTE board."
According to Solombrino, if the merger received board-level approval from both organizations, ACTE would need a 51 percent membership vote to approve the deal. NBTA's bylaws require a 10 percent membership quorum vote and then a 51 percent approval vote from the quorum.
As a result of the rejection of the merger deal, both ACTE treasurer-elect Mary Ellen George and treasurer Brad Seitz have resigned from their posts on the previously 15- member ACTE board.
Following the board action, ACTE released a prepared statement from Weeks stating that, "ACTE's board of directors has concluded that meeting our mission can best be accomplished by following our own course of action."
Neither Gurley nor Weeks responded to several BTN requests for comment.
"The Association of Corporate Travel Executives and the National Business Travel Association deliver very different products and services," said an ACTE spokesperson. "Our membership pays for a level of independence and unique service they can get no place else. It would be a mistake to simply assume that one association can simply replace the other."