Ebookers' expansion forges ahead with purchase of Swedish Net firm
Tuesday 28 December 1999
The UK group agreed to buy STT Airways, a Swedish Internet travel firm with total sales of $26m (pounds 16m) in 1999. STT is a holding company whose subsidiary, Bijettakuten, is one of Sweden's leading online discounted fares agencies. The acquisition includes a business-to-business wholesale traditional travel company and a corporate travel unit.
Dinesh Dhamija, ebookers' chief executive, said: "We had planned to deliver various acquisitions over a period of nine months following our IPO. We are very pleased to be ahead of schedule."
Sanjiw Talwar, the UK group's finance director, said: "We want to be in all the major European countries by the third quarter of 2000." Specifically, he said, the company was targeting acquisitions in Italy, Spain, Norway and Denmark.
The value of yesterday's deal was not disclosed but Mr Talwar said ebookers had spent a combined $6m since its listing on acquisitions in Germany, Finland and Sweden. The company raised $55m after expenses from its initial public offering on the US Nasdaq exchange and Germany's Neuer Markt.
Sweden has the third highest Internet penetration in the world, at some 30 per cent. Mr Talwar said: "We looked at two or three companies in Sweden. But STT had the strongest web presence and the best relationships with local airlines." He said the Swedish group also had a strong management team, which would stay on board after the acquisition was completed.
Ebookers' shares rose 2.8 per cent, to 18.5 euros (pounds 11.66) on the Neuer Markt. The shares have fallen 29 per cent since trading began on 12 November, when their spectacular stock market debut left Mr Dhamija with a stake worth $304m. In US trading, the shares closed unchanged at $18 on Thursday, the last day of trading before the acquisition was announced.
Earlier this month, the company announced that its sales for the third quarter had trebled to $8.1m. Excluding sales from the group's French and German acquisitions, turnover for the three-month period exceeded the entire 1998 calendar year. But the company reported a net loss of $2.4m, against a $100,000 profit previously.
Ebookers has access for selling direct negotiated fares to 26.5 million Internet users in Western Europe. The group's website now averages about 1,000 new registrations a day and site visits were about 400,000 in November. But the crucial "look to book ratio" is just 1 to 2 per cent.
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