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The operator intends to buy the rest of Gold Medal founder and sole shareholder Ken Townsley’s stake from 31 March 2010, with the total payable capped at a maximum of £87m. Preston-based Gold Medal will retain its chief executive, Terry Fisher, and chief financial officer, Steve Bacon, who both joined in 2006. They are credited with turning around Gold Medal’s fortunes, improving EBITDA from a loss of £1m in March 2006 to an anticipated profit of £9m in March 2009. For the year ended 31 March 2008, Gold Medal achieved EBITDA of £6.4m and profit before tax of £5.3m on gross sales of £300.2m, and had gross assets of £92.7m at year end. The management team of Gold Medal will report to Ian Derbyshire, chief executive of Thomas Cook Independent Travel for UK & Ireland.
Manny Fontenla-Novoa, group chief executive for Thomas Cook Group, said: "The acquisition of Gold Medal is a very good opportunity to strengthen significantly our position in the important independent travel sector. ‘Through Gold Medal we have access to excellent product, great technology and highly experienced travel experts, and I believe that we have secured a financially attractive transaction with appropriate incentives for existing management to deliver further value in the business."
Now the UK’s fourth largest tour operator, Gold Medal employs about 500 staff and flew 420,000 passengers overseas on scheduled flights in 2008. Fisher said: "This partnership… opens up for us a brand new route to market through Thomas Cook’s 800 retail outlets, in addition to our existing independent travel agent partners who we will continue to fully support as normal.|
Thomas Cook’s scheduled air business, FlightSavers, will be operated by Gold Medal’s management team. The combined Gold Medal and FlightSavers business will operate as a standalone entity. FlightSavers had gross sales of £90.4m in the year ended 30 September 2008 and it is expected that annual synergies in excess of £4m will be generated as a result of cost efficiencies and better distribution. Fisher added: "Thomas Cook will add further volume to Gold Medal with the addition of their FlightSavers scheduled air business and will allow us to offer our customers an even wider range of products with the introduction of the full Thomas Cook portfolio."
Formed in 1976 by Townsley, Gold Medal is the world’s largest tour operator to Dubai and offers more than 1,500 destinations. Its brands include Gold Medal, which sells through independent travel agencies, Netflights.com, which sells directly to consumers, and upmarket operator Pure Luxury.
The acquisition is subject to Competition Commission clearance, and is expected to complete in the first quarter of 2009.
The Manchester office of European Investment Bank, Altium, acted as financial adviser to Townsley and the management team on the transaction. Townsley will assume the role of president of the enlarged business on completion.
Altium’s corporate finance managing director Mike Fletcher said: "This transaction underlines the fact that, even in tough financial markets, consumer businesses with strong brands and top quality management teams will always be highly prized. The deal will enable Gold Medal management to continue to grow the company with the backing of the UK’s number one tour operator Thomas Cook, as well as providing additional security to both customers and employees." Townsley added: "I am immensely proud to have built the Gold Medal group over the past 30 years into the UK’s most successful privately owned travel company. I feel that in Thomas Cook, I have selected a perfect partner to take this business forward into the next 30 years."
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
