TUI Travel signs a joint venture with Intrepid Travel

TUI Travel announce the agreement with Intrepid Travel (by a joint-venture), a group of touroperators specialized in adventure tourism, to create a new global brand in that segment and increase in the adventure tourism market.

Darrell Wade of Intrepid Travel and Darren Mee of TUI Travel launch PEAK Adventure Group

The combined business will operate with a multichannel and multibrand strategy and will bring up new growing opportunities.

This move is based on the contribution of the business that each touroperator has in this area and has no cash component. The new company will be owned by TUI Travel by 60%, while the remaining 40% belong to private shareholders of Intrepid Travel.

With this transaction is expected to generate synergies, especially caused by the increased economy of scale, at least 10 million pounds (11.8 million euros) per year during the first three years.

Intrepid Travel is based in Melbourne, Australia, and serves about 100,000 customers a year, from the major tourism markets in the world of adventure, as explained from TUI. For the financial year ended 30 June 2010 had revenues of 69.4 million pounds and 5.3 million pounds of profit before tax.

For its part, the adventure tourism businesses of TUI Travel are based in UK, Australia, North America and the Netherlands, serving some 240,000 clients per year. At the end  of  financial year on September 30 generated revenues of £ 185.3 million and profit before tax of 6.8 million pounds.

The combined business will operate with multichannel and multibrand strategy, and bring to TUI, new growth opportunities, including new products, distribution channels, markets and destinations.

The chief executive of TUI Travel Plc, Peter Long, has commented on this operation that specialization is an important part of the business of the company and "a key driver of growth given the strong margins and development opportunities."

Ensures that the alliance with Intrepid Travel is an important occasion to improve its position in the field of adventure. "We believe this company has a great potential for value creation through increased scale, synergies and growth of our combined businesses."

The Board of the new company will be headed by the director general of Specialist & Activity Sector of TUI Travel Plc., John Wimbleton, and the CEO is the CEO and founder of Intrepid Travel, Darrell Wade.

In conclusion, this type of agreements creating a joint-venture causes that some companies can expand their business and trying to make a new way for their service specializating it and change their loses to benefits.