Reed & Mackay venture into stake sale to fund expansion

Private-equity group ECI Partners is in exclusive talks to take a stake in Reed & Mackay, arguably the City's favourite travel agent. The move could also see ISIS Equity Partners, which holds a significant minority holding, add more equity.

It is understood that ECI's purchase would value the business at around £50m.

Reed & Mackay provides travel services to many top City law firms as well as companies in the insurance and finance sectors. ISIS paid just £4.9m for its stake in November 2005 when its revenue was £55m.

In a statement, Reed & Mackay confirmed it was in exclusive negotiations to sell a stake and added that the funds would be invested in new technology and expansion into new markets, including Africa, South America and Russia. The company added: "Despite the backdrop of broader economic uncertainty, the business has continued to grow by 12 per cent each year for the past five years and is well placed to capitalise on this strong growth to date in 2011 and beyond."

The business makes more than 110,000 air and hotel reservations every year, and has 250 specialist staff. ECI's investments include alcohol retailer Bargain Booze and bathroom product manufacturer DLP.