Online travel agent On the Beach Group PLC (LON:OTB) has agreed to buy luxury holiday operator Classic Collection Holidays Limited for £20mln.
On the Beach, which specialises in beach holidays to Europe, said it believes the acquisition will be earnings enhancing in the first full year of ownership.
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Following the completion of the acquisition, the group plans to expand Class Collection’s range of luxury holiday packages and to launch an online booking portal exclusively for travel agents called Classic Online.
"The acquisition represents a continuation of On the Beach's strategy, whilst leveraging the group's capabilities to access the circa five million short-haul beach holidays that each year are booked offline," the company said.
The group said new laws introduced in July to protect customers who purchase package holidays in the European Union has made it increasingly difficult for independent agents to offer deals cost-effectively.
In the year to 31 October 2017, Classic Collection reported earnings (EBITDA) of £2.6mln and gross assets of £18mln.
The total consideration includes £14.6mln in cash on completion, another £2.7mln in cash a year after completion, and £2.7mln in shares.