Flight Centre Travel Group Ltd (ASX: FLT) has announced more acquisition news to boost its overseas earnings.
Flight Centre is one of the world’s largest travel agencies and has company-owned operations in more than 23 countries, while their corporate travel management network spans more than 90 countries. The Group employs more than 19,000 people and owns 2,800 businesses.
Flight Centre’s Latest Acquisition
The business has a tendency to make acquisitions to boost its market position globally, as it did recently in Europe.
Today, Flight Centre has announced more global expansion. It has taken its ownership of North American premium leisure and corporate travel business Les Voyages Laurier du Vallon (LDV) to 100%.
Flight Centre already owned 75% of LDV after an investment two years, but now it has utilised its (rolling put/call) option to buy the rest of the Quebec-based business.
The travel agent’s management said that LDV has become an important part of Flight Centre’s business during the past two years and had contributed to the company’s strong growth in the region.
The acquisition terms weren’t disclosed, but Flight Centre Managing Director Graham Turner said:
“LDV has proven to be a valuable addition to our network in the Americas and we are pleased to take 100% ownership of the business. In addition to delivering solid earnings growth over the past two years, its corporate travel presence has enhanced our already strong customer offering across Canada and throughout North America in general.
“In leisure travel, LDV’s premium offering, which is similar to the highly successful Travel Associates model we use in some countries, has complemented the Flight Centre branded offering in Canada and has allowed us to target a broader customer base in this fairly large market.”
Is Flight Centre A Buy?
I’m generally not enthusiastic about the prospects for the bricks and mortar network segment of Flight Centre’s business, although the entire company does have strong economies of scale.
However, I appreciate the growing global side of the company’s earnings and the online element.
Overall, I’m not personally attracted to buying shares but I can understand why other people are. But I’d rather buy the shares of the reliable businesses in the free report below instead.
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