HOUSTON, TX--(Marketwired - December 17, 2015) - Leading travel provider Corporate Travel Management (CTM) (CTD.AX) is expanding its North American footprint and market share with the acquisition of California-based Montrose Travel, announced today.
The purchase is expected to make CTM one of the 12 largest travel companies in the country, operating out of 19 cities, just three years after entering the market.
CTM founder and managing director, Jamie Pherous, said the acquisition met the company's strict criteria for acquisitions and followed 12 months partnering with Montrose Travel on programs and client services.
"We have consistently said to the market and our industry that we would pursue acquisitions where they make our business stronger, and deliver compelling customer benefits," Mr. Pherous said.
"When we entered this market in 2012, we made it clear that acquisition opportunities would be assessed to determine whether they showed cultural compatibility, integration simplicity and quality management.
"Montrose Travel epitomizes that approach; it is an iconic business in California, operating for more than 60 years.
"They possess a capable and passionate management team, are leaders in travel in their region, enjoy high client and staff retention, and will take ownership in CTM via CTD stock."
Joe McClure, president of Montrose Travel, said the corporate values of the two companies were aligned.
"We have watched CTM build a wonderful business over the years based on highly personalized service delivery with best-in-class technology solutions; we share this same philosophy," Mr. McClure said.
"We believe CTM is an excellent fit to enhance our service offering to both current and future clients as well as independent travel professionals while providing exciting new career opportunities for our employees."
Mr. Pherous said the acquisition of Montrose Travel would establish a Californian hub for CTM, growing business in a strategic North American market.
"Together with our well established businesses in North America, we can significantly improve our offering for local, regional and global clients."
The acquisition will be funded through stock, with the balance (80 percent) paid from operating cash flow from the US business and short term debt.
CTM's total transactional value in North America is now expected to exceed $US750 million next year following the purchase, with the addition of Montrose Travel's forecasted sales.
CTM has upgraded its profit forecast to $AU68 million for this financial year, with previous EBITDA guidance in the range of $AU61.3m-$AU63.8m.