Travel Acquisitions Group and Tzell Travel Group merged to create what they described as "North America's 10th largest travel company in terms of annual sales volume, and eighth largest after all travel franchise unit sales are included in the count."
Tzell president and CEO Barry Liben also was named CEO of TAG. Terms of the deal were not disclosed.
Formed in January when Carlson sold Carlson Leisure Group to CLG's management team, TAG also includes Travel Leaders (formerly the Carlson Wagonlit Travel Associates group of franchised travel agencies) and a separate group of individually branded travel agencies including ProQuest Travel Group of Holland, Mich., TraveLeaders in Coral Gables, Fla. and now New York-based Tzell.
The merger is one of many travel management company transactions in North America this year. It's a business in which consolidation is a constant. Other 2008 deals in North America included the acquisition of Abacus Travel by Travel & Transport, the merger of Andavo and Christopherson Travel, FlightCentre's acquisition of Liberty Travel, Egencia's purchase of Synergi Global Travel Management in Canada, Carlson Wagonlit Travel's buy of Piedmont Travel Inc., and the sale of a portion of Worldtek Travel to two investor-executives who formerly ran Sea Gate Travel (which Hogg Robinson Group bought in 2005).
TAG had purchased Florida's TraveLeaders earlier this year, and then used a variation of its name (Travel Leaders) to rebrand the Carlson Wagonlit Travel Associates franchise group.
TAG is planning more acquisitions, but Tzell officials attempted to distinguish the initiative from other industry roll-ups, such as Navigant International, which CWT acquired in 2006after it grew by cobbling together dozens of TMCs. TAG's acquisition funding comes in part from One Equity Partners, which owns an undisclosed portion of the company and separately holds stakes in Carlson Wagonlit Travel and Travelport.
"I don't think that is the game plan we have," Liben told The Beat. "I don't know I'd say it is like Navigant. We want to grow it. When and how? We'll see. There is no timetable, no deadline. One Equity Partners for the past couple years has been very active in the travel space. Being involved with this deal, we're looking at other possibilities that might make sense for TAG. We can confirm there is something happening soon."
According to Tzell senior vice president Jerry Behrens, "When Navigant made its moves, it turned them all into Navigant, which was comparable to a Carlson Wagonlit, Amex, BCD, HRG--as evidenced by CWT purchasing Navigant and assimilating it. We're not imposing the Tzell brand across the board. We're not imposing the TraveLeaders brand."
Despite that assertion, Liben said the Florida-based TraveLeaders TMC "might end up as part of Tzell down the road. It is premature to say. Obviously we have a little bit of learning to do now to get acquainted with everything in our new operation and keep Tzell running efficiently. We're going to go slow and make decisions that make sense. Today, everything stands alone as is."
"Our short-term goal is to make sure all these operations are at top efficiency and top profitability, and making sure we have the best synergies we can, in both income and expense reduction, and then looking for the best new acquisitions out there with the best management," said Liben.
The first steps during the next few months include developing and implementing a plan to integrate the back-office technology of TAG's various owned facilities, which would aid client service and management reporting, Liben said. "We'll have much deeper pockets to do these things and come up with a much more sophisticated program," he added. "Also, we've been successful in several bids lately. We think we'll be more successful now, with greater critical mass and greater outreach throughout the country. We think this will support our London office that's only seven months old and support the whole TAG conglomerate.
The mergers also mean TAG would increase its "relevance to suppliers," potentially resulting in more deals, but the executives said Tzell would retain its own vendor arrangements.