Club Mediterranee announces two possible transactions
- Proposed sale of Jet tours to Thomas Cook Group plc
- Proposed acquisition by private equity fund 21 Central Partners of an 80% stake in Club Med Gym
Following Jet tours and Club Med Gym’s successful recovery and refocusing, Club Mediterranee announced today two possible transactions concerning the two companies:
- The proposed sale of Jet tours for €70 million to Thomas Cook Group plc, with a strengthening of the partnership between Club Mediterranee and Thomas Cook France.
- The proposed acquisition of an 80% interest in Club Med Gym by private equity fund 21 Central Partners, based on an enterprise value of €74 million.
The
Works Councils of the companies concerned have been convened as part of the information and consultation process. In addition, the proposed
Jet tours Transaction, is subject to approval by the European competition authorities.
These transactions would enable Club Mediterranee to focus its resources on its goal of being the worldwide specialist in all-inclusive, upmarket, friendly, multicultural vacations.
In addition, the nearly €100 million in proceeds from the sales would significantly strengthen Club Mediterranee’s financial structure. At 31 October 2007, the group already had € 234 million in cash holdings.
The transactions would also enable Jet tours and Club Med Gym to pursue their development.
Proposed sale of Jet tours to Thomas Cook Group plc
The acquisition of Jet tours in 1999 was part of a strategy designed to increase volumes and market share in France, in a fast growing tour operating market. Beginning in 2003, the company played a critical role in broadening Club Med’s indirect distribution system.
The objectives set for the company have been amply met. Today, 1,600 travel agencies sell Club Med vacations compared with 600 five years ago, while the new agencies added during the period accounted for nearly 12% of individual sales last winter.
Jet tours, which has implemented its upmarket repositioning strategy, is a recognized brand and a profitable, growing leader in the French travel and tourism market.
By joining one of Europe’s second largest travel group, Jet tours would be able to advance to the next stage in its development and growth, while the combination of the two companies would create France’s third largest tour operator.
As part of this project, Club Mediterranee and Thomas Cook would broaden and deepen their distribution partnership in France, with the goal of driving faster growth in Club Med sales in Thomas Cook agencies.
In addition, Jet tours would continue to offer the highly popular Club Med Discoveries tours.
Independently of the proposed transaction, Club Mediterranee and Thomas Cook are going to work together to develop synergies in airline travel.
Proposed sale of a stake in Club Med Gym to 21 Centrale Partners
Club Med Gym, France’s leading fitness chain with 22 gyms in Paris and more than 72,000 members, was acquired by Club Mediterranee in 2001. Thanks to extensive reorganization and improvements in both gym facilities and the member experience, Club Med Gym is now deploying an efficient business model.
To enable Club Med Gym to secure its medium and long-term growth, in particular by continuing to move existing gyms upmarket and opening new ones in Paris, Club Mediterranee announced today that it is proposing to sell an 80% interest in the company to 21 Central Partners, based on an enterprise value of €74 million.
After successfully refocusing its operations and returning to profit, Club Med Gym would gain the backing of a top-tier financial partner to help drive faster growth over the medium and long term.
In addition, Club Mediterranee would grant Club Med Gym a license to use its brand.
21 Centrale Partners is one of France’s leading private equity firms, which invests primarily in international companies based in France, through leveraged buy-outs in partnership with company management. It is a member of 21 Investimenti, an international, multi-institution private equity group led by Alessandro Benetton and G?rard Pluvinet. It currently manages around €1.5 billion in assets.
Concerning the projects,
Henri Giscard d’Estaing, Chairman and Chief Executive Officer, said:
“We want to focus our resources on becoming the worldwide specialist in all-inclusive, upmarket, friendly, multicultural vacations. Today, Club Mediterranee has the opportunity to strengthen its financial structure and dedicate additional funding to complete its move upmarket and pave the way for its future growth. In addition, this would give Jet tours, which has successfully repositioned itself in the premium market, the opportunity to pursue its growth and Club Med Gym, after its successful refocusing, the opportunity to experience a new phase of growth by opening new gyms.”
Vicky Karantzavelou
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Tuesday, June 10, 2008