Travelex chief weighs selling out for £1bn

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The Independent Online

Lloyd Dorfman, the world's most successful bureau de change operator, in effect put his future career up for auction yesterday, when he said that he was considering selling a stake in his £1bn Travelex business to private equity investors.

Lloyd Dorfman, the world's most successful bureau de change operator, in effect put his future career up for auction yesterday, when he said that he was considering selling a stake in his £1bn Travelex business to private equity investors.

A statement said: "Following the receipt of a number of unsolicited approaches from third parties interested in acquiring the business, the board of Travelex announces that it is reviewing all its strategic options for the future development of the business. In particular, the greater involvement of private equity in the ownership structure of the company is being considered."

The seriousness of the exercise has been underlined by the fact that Mr Dorfman, who owns 60 per cent of Travelex shares, has hired Deutsche Bank to advise on the possibilities. He said: "Travelex is now the world's largest foreign exchange specialist and a global brand. We have exciting plans to broaden our product portfolio, add new customers and extend our global reach, and the strategic review will consider how best to achieve these ambitions."

Flotation and sale to a bank or other financial group are other options. As Mr Dorfman is only 52, he would be likely to agree to an earn-out lasting several years. This would tie his eventual sale price to performance and maintain his link with the Travelex brand.

While there is no certainty that the review will result in any change to the present ownership structure of the company, history suggests that once such reviews begin they acquire a momentum of their own. Analysts point out that it can be hard to return to the original status quo once the founder has publicly admitted to considering a sale.

Although Mr Dorfman's family had started the foreign exchange business, he struck out on his own in 1976 with a £25,000 loan to start a branch in central London. No one else believed that a small player could break the stranglehold of the banks and established players such as Thomas Cook.

But Mr Dorfman broke through by siting branches in what were regarded as unusual locations such as the service station on the M2 motorway between London and Dover. The company has latterly led the way in commission-free and internet-based dealing.

For last year Travelex made profits of £53.4m on turnover of £465m. The company has doubled in size since the £440m takeover of Thomas Cook's financial services operations four years ago.

However, Mr Dorfman's reference to considering how best to achieve his ambitions may indicate that Travelex has gone as far as it can without a substantial capital injection, or access to a global network.

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