TBO Tek Eyes Rapid Expansion In US Luxury Travel Market After Acquisition Of Classic Vacations
TBO Tek wants to focus more on Europe, North America and eventually Asia Pacific to expand its global footprint, but further acquisitions are not planned yet.
Global travel distribution platform TBO Tek Ltd., which recently acquired Classic Vacations to strengthen its presence in North America, expects to significantly benefit from this deal. Speaking to NDTV Profit on Monday, Ankush Nijhawan, Co-Founder, Joint MD TBO Tek, emphasised the strategic value of Classic Vacations’ long-standing expertise in selling luxury travel globally.
When asked if TBO Tek’s revenue could double in three years, he declined to make a direct comment, but highlighted that the best practices from Classic Vacations will be integrated into TBO’s core business, reinforcing its focus on premium and luxury outbound travel.
TBO Tek announced the acquisition of Classic Vacations on Sept. 3 for $125 million. On the growth prospects post-acquisition, Co-Founder and Joint MD, Gaurav Bhatnagar, explained that North America is a mature, competitive travel market and this deal enables faster entry with synergies in place.
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“Classic Vacations has been around for nearly 50 years and while we’ve been building organically and will continue to do so, having a seat at the table often requires strategic acquisition. Given we had access to capital, a quality target and clear synergies, it made sense to accelerate our journey,” he said.
From an Ebitda perspective, the acquisition is marginally dilutive initially but is accretive at the GMV-to-Ebitda level, Bhatnagar explained.
“We are paying $125 million subject to some adjustments for a business that for the you know for the trading 12 months is probably going to generate a little more than 11 million dollars of Ebitda…..so that's the multiple, you know it's a little more than 11 times Ebitda, which we believe is a fair value to pay,” the top executive added.
On global goals, Nijhawan outlined that while the Middle East and India markets are mature for the company, the company will focus more on Europe, North America and eventually Asia Pacific, but nothing is planned yet.
“While markets like India and the Middle East are mature for us, we’re doubling down on sales efforts in Europe, the US and eventually Asia Pacific. With the US being the top travel market, Classic Vacations gives us strong positioning. Outbound travel is growing globally, and TBO is well-placed to capitalize. For now, our focus is on integrating Classic; no immediate acquisitions are planned for FY26,” he said.
On upcoming GST reforms, Nijhawan acknowledged a potential uptick in travel demand, with the upcoming festive holidays.
“I would say that definitely there should be some uptick…let's see how it plays up, but yes, we do have Diwali around the corner…so, there will be some short all holidays you know whether it's…..domestic or outbound….but definitely the GST card will help hopefully the travel and tourism business……keeping in mind more disposable income and most discretion spent by all of us,” he explained.
Shares of TBO Tek Ltd. closed at Rs 1,580 apiece, up 1.63%, on the NSE, while the benchmark Nifty50 settled at 25,069.20, down 0.18%.
