Gullivers trio net £570m in sale to travel giant Cendant

Gullivers Travel Associates, a privately owned company which packages trips for Asian and European tourists, is selling itself for $1.1bn (£570m) to America's Cendant, the world's largest travel group whose brands include Avis rental cars.

Gullivers Travel Associates, a privately owned company which packages trips for Asian and European tourists, is selling itself for $1.1bn (£570m) to America's Cendant, the world's largest travel group whose brands include Avis rental cars.

The deal will net hefty payouts for the founders of Gullivers - David Babai, Eddie Faith and Uzi Kattan - who started the company in 1975 as a small tour operator. Gullivers is now the largest privately owned retailer of holiday packages to travel agents and operators in the world. It is on track to notch up $1bn in gross bookings in 2005, with net revenues of $230m.

Mr Babai, the chairman of London-based Gullivers, will remain with the company, along with other directors, including Murray Sweet, the day-to-day manager of the business.

The deal is the second major foray into the UK by Cendant. It bought ebookers for $400m this month to increase its presence in Europe. Yesterday, it said it would continue its strategy to broaden its scope by adding Gullivers, which has 31 offices in 25 countries, with a particularly strong presence in Japan, China and Hong Kong.

While Gullivers sells directly to travel agents and operators, a second brand owned by the company, Octopus Travel, sells to consumers online and through a call centre. Octopus Travel last week launched a new service, Octopus Travel Club, which pays commissions to customers who recommend it to others.

Gullivers is owned by two separate private entities, Donvand, and Octopus Travel Group.

Mr Babai and the two other founders have substantial holdings in Gulliver. Depending on the company's performance next year, Cendant said "certain shareholders" may receive a windfall on top of the $1.1bn being paid in cash for Gulliver. Henry Silverman, the chief executive of Cendant, said: "The acquisition of Gullivers provides us with vast wholesale hotel, tour and package travel content, and expands our global footprint in the travel distribution business."

The acquisition of Gullivers will be funded by proceeds from the initial public offering of Wright Express, a vehicle management company owned by Cendant, in February or March.

The purchase of Gullivers and Octopus is part of Cendant's strategy to broaden its global reach into areas of the travel market which are growing at a faster pace than the US sector. Mr Babai said: "The partnership with Cendant will create a formidable force in the travel distribution business."