Hot On The Acquisition Trail, Navigant Expands In S.E.
<B> Hot On The Acquisition Trail, Navigant Expands In S.E.</B>
By Sarah Welt
Denver - Navigant International, the sixth largest U.S. travel agency with $1.76 billion in air sales, is continuing its aggressive acquisition campaign, this month signing a deal to acquire First Travelcorp Inc. of Raleigh, N.C. and gobbling up two Pittsburgh-based agencies, the $28 million Forbes Travel and $25 million Couch/Mollica Travel in July, as well as Moran Travel of Boston, with $30 million in annual sales, in June.
The First Travelcorp acquisition has been approved by the directors of both companies and is subject to the approval of First Travelcorp shareholders, scheduled to meet Sept. 21.
Navigant was interested in buying First Travelcorp because "it would provide Navigant with a major presence in several key business markets throughout the Southeast, and allow us to enter another one of the top 25 corporate travel markets in the United States," said chairman and CEO Edward Adams in a statement. First Travelcorp president Garland Tucker said the agency wanted to "gain access to enhanced technology, lower costs and a global presence."
<B>Gaining Leverage</B>
Meanwhile, Navigant president and COO Thomas Nulty said the other agencies were interested in selling because they wanted to take advantage of the leverage and technology that a large national agency can provide. As for Navigant's interest, "We'll buy a well-run company just about any place," he noted.
Forbes co-owner Ed Siegel said he decided to sell because "we needed more bells and whistles that technology can provide us. We were looking for a partner that could provide all that to us and let us continue to run Forbes Travel the way we have for the past 29 years, and Navigant offered all those things to us."
Moran Travel president Henrietta Gates said she was interested in selling because "we thought it was important to have greater resources available to us and offer clients enhanced technology and a global presence to have greater negotiation power." She added that Navigant "believes in keeping the decision-making and client contact at a local level and we share that philosophy."
Navigant last month also announced that it has expanded its credit facility from $60 million to $125 million "to continue with our acquisition plan," Nulty said. It "is a vote of confidence by investors and banks that support us and think we are headed in the right direction." He noted that the company has been inundated with calls from travel agencies that would like to be acquired.
The mega agency also late last month announced it has joined Woodside Travel Trust. While Navigant is comprised of 19 travel agencies, it will operate as a single-branded entity by year-end. Under the terms of the agreement, Navigant, which, like all other WTT partners, owns one share of WTT stock, will have one vote and be eligible to have one representative elected to its board of directors. Prior to this deal, Navigant was a U.S. affiliate of Synergi but announced last fall its plans to leave McCord Travel Management to fly it alone (BTN, Nov. 2, 1998) effective March 31 of this year.
WTT's senior vice president of global development and partner services Patty Corbino said the deal would give WTT "more leveraging power and a greater distribution channel."
In other news, Navigant has introduced Report FLYR. The product will give travel managers the ability to access information via the Internet and drive their own management reports. Report FLYR was created in conjunction with Hi-Mark Software and Aqua Software Products Inc., and in July was rolled out at Associated Travel and McGregor Travel, Nulty said. "I hope to have everyone using it by the end of the year." Additionally, last month the company announced it added Xtra On-line Corp.'s PowerTrip.com product to its Business FLYR suite of preferred e-based corporate travel booking tools.