What's Happening?
Webjet Group has announced the acquisition of Locomote, a corporate travel management company, for $17 million in cash, with an additional $6 million deferred payout contingent on EBITDA targets. Locomote, based in Melbourne, is known for its digital business travel technology, offering a comprehensive corporate booking platform. The acquisition will see Locomote rebranded as Webjet Business Travel. Webjet Group CEO Katrina Barry emphasized the strategic importance of corporate travel for mid-sized businesses, aiming to double the group's total transaction value by 2030. The acquisition allows Webjet to offer a distinct business travel service without a lengthy development phase, leveraging Locomote's existing technology. All current Locomote staff, including co-founder and CEO Ross Fastuca, are expected to remain with the company.
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Why It's Important?
The acquisition of Locomote by Webjet Group is significant as it strengthens Webjet's position in the corporate travel sector, particularly for mid-sized businesses that may not afford traditional corporate travel management services. This move aligns with Webjet's strategic goal to expand its transaction value significantly by 2030. By integrating Locomote's technology, Webjet can offer enhanced services at a lower cost, potentially increasing its competitiveness in the corporate travel market. The acquisition also reflects broader trends in the travel industry, where digital solutions are increasingly important for efficiency and cost-effectiveness.
What's Next?
Webjet plans to implement a $25 million on-market share buy-back program over the next 12 months, indicating confidence in its financial strategy post-acquisition. The integration of Locomote's technology into Webjet's offerings is expected to proceed swiftly, with no major disruptions anticipated for Locomote's current operations or staff. The market will likely monitor Webjet's performance closely to assess the impact of this acquisition on its financial health and market position.
Beyond the Headlines
The acquisition highlights the growing importance of digital transformation in the travel industry, as companies seek to enhance their offerings through technology. This trend may lead to increased competition among travel management companies, driving innovation and potentially lowering costs for consumers. Additionally, the retention of Locomote's leadership team suggests a focus on maintaining continuity and leveraging existing expertise to maximize the benefits of the acquisition.
