First Choice buys adventure tours firm

First Choice, Britain's fourth-biggest tour operator, returned to the acquisition trail yesterday for the first time since 11 September, bolstering its specialist holidays portfolio with an adventure travel operator.

First Choice is paying an initial £8.75m for Exodus Travels, a privately owned company that offers intrepid travellers a range of action-packed holidays from trekking to the Mount Everest Base camp to following the hippy trail from London to Kathmandu. First Choice will pay an additional £1.5m depending on the first-year profitability.

"The adventure holiday market is growing at double digit forecasts compared with the mature mass holiday market," said Peter Long, First Choice's chief executive. Analysts said that buying Exodus, which is the UK's second-biggest adventure holiday company, helped First Choice to propel its strategy of building up a portfolio of high margin, specialist holiday operators.

First Choice will acquire the share capital of Trek Investco, Exodus's owner, from Royal Bank Private Equity and the management.

Mr Long brushed aside concerns that the dangerous nature of adventure holidays would deter potential travellers: "Today people like exploring and doing things differently." He added that he saw opportunities to cross-sell adventure holidays to First Choice's existing customer base. "You may find that within the family who takes a beach holiday in Majorca, the father and son want to go on a trekking holiday," he said.

Mr Long intends to use Exodus as a base for future acquisitions in what is a fragmented market place. He pointed to the group's Marine division, which has grown organically and through consolidation opportunities from being a UK-based sailing operator to the world's largest marine business.

While the collapse in demand for air travel after 11 September sent tour operators reeling, holiday companies such as First Choice and My Travel (formerly Airtours) are expected to show remarkable resilience when they report half-year figures later this month. First Choice's shares, which plunged to 77.5p last September, rose 0.5p to 119p.