‘We know of a lot of businesses on the market at the moment’ – industry experts weigh in on TTC sale

‘We know of a lot of businesses on the market at the moment’ – industry experts weigh in on TTC sale
Sofia Geraghty
By Sofia Geraghty


Last week news broke that The Travel Corporation (TTC) – one of the largest independently-owned travel companies in the world – had been sold to private equity firm Apollo Management.

Most people in the industry will be aware that the ramifications of the deal will go much further than just those involved. Travel Weekly spoke to Intrepid’s managing director Brett Mitchell and founder and CEO of Crooked Compass Lisa Pagotto (who you may have seen on Shark Tank) to understand what the deal means for the market.

Family-owned The Travel Corporation acquired by US private equity firm

Can we expect more deals to follow?

According to Mitchell, Apollo is not the only private equity firm eagerly eyeing up the travel industry.

“We know a lot of businesses that are on the market at the moment, across all regions of the UK, Australia and North America. They are on the market because there’s a lot of demand to pick up and cap those sort of businesses.

“Ultimately, we see that as a really good sign,” he continued. “When you see private equity money wanting to invest in travel that’s a great sign for the industry. The trend of people wanting to spend money on experiences over things these days is accelerating, and we see that as a real positive.”

Intrepid is watching the market closely, he continued, adding that he expects more deals to follow shortly.

“I think there’ll be a lot globally in this space over the next six to 12 months.”

Brett Mitchell

Is private equity a good exit strategy?

Whilst TTC has enjoyed incredible success being run by a family for more than 100 years, all good things have to come to an end Pagotto said.

“They can’t run it forever. It’s all about a succession plan.”

It could be likely that the “challenging” conditions of the pandemic could have “triggered conversations about succession planning what it looks like,” she said.

“That conversation led them to say ‘maybe private equity’,” is the way to go, she said. It is important to note, however, that Apollo “is not just any private equity firm”.

“They are a firm with a history of investing in other significantly sized businesses within our sector.”

“There’s a proven track record, as opposed to just choosing who has the best price.”

For Mitchell, not everyone has the luxury of choice when it comes to choosing an exit strategy.

“Sometimes you don’t have the luxury of having three, four or five different exit strategies, whether that’s selling down, keeping a part of it or going into a listed environment. Generally, PE is the most common, it’s probably the easiest and quickest way to get the best bang for your buck a lot of the time.”

What does this mean for TTC staff?

The “tricky” part of the deal for staff will be adjusting from working for business owned by a private family to one backed by PE capital, Mitchell said.

“You’ve got this culture in this way of working and management understands all of those sort of idiosyncrasies – what the owners expect etc,” he said.

“When you get completely new owners they’re coming in with their own ideas, sometimes they’re coming in with their own skill sets and different people and that changes thing.

“Change in general can scare people so to manage that shift and keep the culture – all of that’s critical.”

How can travel companies ensure PE backers understand the industry?

With private equity being all about growth and scalability, and travel increasingly being about sustainability and creating a unique experience, how can travel companies ensure that they work with PE in a way that is beneficial for the industry?

For Pagotto, who appeared on the TV show Shark Tank seeking investors, it is all about communication.

“It all comes down to negotiation. When you go into a deal with any kind of shareholder are they talking about the plan for the business?” she said.

In Crooked Compass’ case, it is important to look at and highlight why the business is already successful, Pagotto said.

“For us, it’s not about trying to make the most money, it’s about delivering the most authentic experience. And that’s the draw card that keeps people coming back, which in turn grows the business. So, I think it would come down to a clear conversation about that.”

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