Houston- and New York-based travel management company Frosch has taken a 51 percent stake in the corporate travel division of Ann Arbor, Mich.-headquartered Conlin Travel, the companies announced. Financial terms of the deal were undisclosed.
The tie-up, which both companies described as a partnership, puts a stake in the ground in the upper Midwest for Frosch—a region where the company historically has not been well-established. The match offers Conlin Travel access to a technology platform that could help the smaller TMC deepen its relationships with existing clients and attract new clients with new capabilities. President and CEO Chris Conlin will transition to the role of managing partner and grow the Great Lakes-area portfolio.
Conlin Travel notched $180 million in sales in 2019, according to the Travel Weekly 2020 Power List. Chris Conlin told BTN the corporate segment accounted for 80 percent of the business prior to Covid-19.
Both companies emphasized the cultural fit of the partnership, which Frosch president and CEO Bryan Leibman said was the most critical factor in all Frosch deals. The company—which had $2.4 billion in sales in 2019, according to Travel Weekly—has grown half its business through acquisition over 23 years, Leibman said, including three in the past 18 months.
RELATED: Frosch Acquires TCG Consulting
RELATED: Frosch Acquires Luxe Travel
RELATED: Frosch Takes Majority Stake in Plaza Travel
RELATED: Frosch Acquires Valerie Wilson Travel
"We’re a company that looks for the best independent businesses in the industry," he said. "We’ve known Chris for a long time, know how [Conlin Travel] runs the business and how they treat their people. We've acquired companies in upcycles and downcycles, but we've always identified the right businesses and people and have become an acquirer and partner of choice."
Conlin said it wasn’t the first time he'd spun off a partnership like this. He did it with the leisure side of Conlin Travel five years ago and doubled the size of the business pre-Covid. In the past 18 months, the company made two smaller leisure acquisitions of its own and has another pending. "It was successful," he said.
On the corporate side this time, Conlin was looking for a keen technology partner, because tech investments have been particularly challenging for small and midsize TMCs due to pandemic-era financial issues, he said, but also crucial for recovery. He specifically noted Frosch's single global platform, New Distribution Capability innovations and the importance of real-time data acquisition and speed of reporting back to clients.
Leibman added: "There’s more pressure on the small guys now because the [tech] investments are bigger, and they have to be mobile and global. We care about these businesses, and we have faced these same things. This is an investment for us but also a great home for them."
As Frosch grows its footprint by concentrating on small and midsize agencies and clients, it has positioned itself as an alternative for them to mega TMCs like American Express Global Business Travel, BCD Travel and CWT. Those bigger agencies—especially GBT, with its pending acquisition of Egencia and recent launch of the Neo1 platform—have focused their sights on the midmarket as the first segment to see business travel momentum since the pandemic.
Asked if he felt the megas were coming after his traditional SME turf, Leibman didn’t flinch.
"There are a lot of things that market demands," he said about SME clients. "They need partners and solutions. We give them local relationships they can trust. We’ve been here, and we’ve excelled in that business. We’ve carried these customers through crisis, we've refunded and exchanged those tickets, and we are trusted partners for suppliers. We welcome competition, but we are positioned as well as anyone."
The new entity will operate under a yet-to-be-determined transitional name before entirely adopting the Frosch brand. The team referred to Conlin Travel's brand equity in the region and the importance of creating a comfortable landing for existing clients during the transition period. Leibman pointed to Frosch's partnership and acquisition integration experience as assurance of a smooth transition for Conlin clients. Frosch also will take in Conlin Travel's 40 corporate travel employees either within the new entity or within Frosch International.
Disclosure: Private equity company EagleTree Capital owns BTN parent company Northstar Travel Group and is an investor in Frosch.
RELATED: Regional Agency Conlin Travel Pushes Ahead with M&A Amid Pandemic