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Travel management company Radius last week announced a private offering that generated a "multi-million dollar global investment" by Cox and Kings Ltd of India, Portman Travel in the United Kingdom and Travel and Transport in the United States. The trio already were investors, but their equal shares now total more than 80 percent of the company, according to its chairman.
"I've been involved in Radius for 14 years now and have been chair for eight or nine of those," said Bill Tech, who also is CEO of Travel and Transport, whose previous 20 percent share of Radius had been the largest. "When we hired Chris Vasiliou three years ago, the thought was to take the company to the next level, and Chris has done that. He has shown us how we can compete with the mega TMCs. Over the last three years, we have grown by 200 percent in sales generated by Radius salespeople in global bids." Vasiliou signed a three-year contract before the announced investment, Tech said.
T&T is a member in Radius mainly for defensive reasons, so that U.S.-based clients wouldn't leave for a global TMC because T&T lacked a solution in another country, Tech said. "We weren't opposed to growing, but it wasn't our purpose," he said. "Now we have seen growth, and existing customers re-up with us and re-up with Radius."
A press statement indicated the capital infusion would "help Radius rescale its infrastructure. ... Our intention is to add significant global sales and support resources as well as expand our technology offering and data management and reporting capabilities." The 60-person company could double headcount in five years, Tech said.
As for technology, Tech said Radius still works with TRX under a long-term data consolidation deal.
The build-or-buy technology question is "a debate right now," said Tech. Radius also is considering a renewed effort to have members furnish technology to other members for global bids. "We want to see what's out there, and it's better to buy than build if we can," said Tech. "But we're still studying it." Radius a year ago put Vinod George in charge of information technology, and former CIO Jay Richmond four months ago took on the role of senior vice president for emerging technologies.
Asked about the reaction to the investments by members with smaller or no shares, Tech said, "This is not about us taking over or controlling Radius; we're all shareholders."
"More and more of our business is becoming global," Tech noted. "Ten years ago, maybe 10 percent to 15 percent of our U.S.-based companies had a presence in one or two [other] countries. Now, over 40 percent of our U.S.-based companies have operations overseas, and they want our help to consolidate those programs and group the data together. We'll eventually go to the airlines and try to get global airline contracts and things like that."
Acknowledging that some corporate buyers are not interested in the Radius model—which makes heavier use of partnerships than do global networks from the likes of American Express, BCD Travel, Carlson Wagonlit Travel or HRG—Tech nevertheless said, "Others think it's the best thing because their offices in foreign countries want to deal with their neighbors in that country. They may not want a foreigner to run it or to have the business in some huge European or Asian call center. And they say, 'We want to keep the business with our neighbors.' It works."
While networked multinational corporate travel sales are growing, the company's hotel rate program remains the "bread and butter," Tech said. Radius claimed annual sales among its 90 members in 80 countries of more than $21 billion.
Radius in 2003 created a Business Development Group segmentof its network based on a financial commitment from 26 members. The network today includes non-owning members and shareholder members, with the new offering creating a distinct trio of majority-shareholder members.
The article originally was published in Business Travel News.
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