The industry's worst-kept secret is about to be made public as Carlson Wagonlit Travel finalizes plans to buy TQ3 Americas in a deal that could be completed as early as next week. A TQ3 official in St. Louis said, "We are always looking for ways to better serve our customers and strengthen our company. However, as a matter of policy, we can't comment on rumors concerning mergers and acquisitions." According to a CWT spokesperson, "As a rule, I cannot comment on industry rumors. However, as Hervé Gourio has said to you before, we certainly are looking at acquisition opportunities."
Gourio, CWT worldwide president and CEO, last year said, "If anything, we are a buyer not a seller," after American Express announced its deal to buy Rosenbluth International
(BTN, Aug. 11, 2003). Asked about consolidation at The Masters Program in Washington, D.C., last month, CWT North America president Robin Schleien said, "You need to be global to compete, and I think that will drive acquisitions."
TQ3 in the United States, formerly Maritz Travel, was put on the market following a family feud among its parent company's owners, the Martiz brothers. According to the
St. Louis Business Journal, Maritz Inc. 40 percent owners Peter and Phillip Maritz last summer filed suit against their brother and 30 percent owner Steve, who is chairman and CEO and controls 60 percent of the voting stock, as well as Maritz Inc. and its board of directors. The suit was an effort to dissolve the company after Peter and Phillip first sued nearly a year before that seeking a greater role in managing the business, the local business paper reported.
Adding TQ3 to its own volume could enable CWT to recapture the title of second-largest U.S. TMC above Navigant International, but there are more changes afoot.
"Travel management companies are in the middle of a multi-year consolidation trend," said Credit Suisse First Boston analyst Scott Barry. "In the end, we envision three or four mega distributors. Navigant is one of the few rollups I've seen that has actually succeeded, but it's perceived as a take-out play."
Partnership Travel Consulting chairman and CEO Andy Menkes speculated that Navigant would be an attractive target for the global TQ3 organization if it loses its current U.S. partner to CWT. "The profile of the company they would be looking for is one that is strong in the U.S. but weak internationally," Menkes said. "As for CWT, the Maritz client base gives them better balance with their overseas portfolio. The consolidation narrows the playing field, but it remains to be seen whether the emerging global giants would yield lower pricing or effectively control pricing."
CWT last year bought TQ3's French affiliate Protravel, which had a contract to remain a TQ3 partner until the end of this year
(BTN, Dec. 8, 2003).