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Flight Centre Travel Group Ltd (ASX:FLT) shares edge higher on acquisition news

flight centre share price

In morning trade the Flight Centre Travel Group Ltd (ASX: FLT) share price has edged higher after announcing an acquisition aimed at fast-tracking its digital transformation.

At the time of writing the travel agent’s shares are up 0.6% to $53.65.

What is the acquisition?

According to the release, Flight Centre has acquired Umapped for an undisclosed but immaterial price.

Umapped is a Toronto-based technology company that provides travel documentation, communication and itinerary management software to the travel industry.

Management believes the addition of Umapped will enhance the company’s web and mobile services to deliver upgraded documentation, better templates and seamless, real-time communication between consultants and customers.

Its products are already being used by Flight Centre’s GOGO wholesale business in the United States and will now be rolled out across its global businesses. It believes it will be integral to FCB 2.0, the next generation Flight Centre brand offering in Australia.

CEO Graham “Skroo” Turner stated that: “We have been impressed with the platform and believe it can have a positive impact on our consultants’ productivity and on our customers’ travel experiences.”

Should you invest?

While I do think this acquisition is a great move by management, I don’t believe it is a game-changer at this early stage.

So, despite the fact that Flight Centre’s shares have fallen significantly since this time last month, I wouldn’t be in a rush to invest just yet.

I feel Flight Centre’s shares are still a touch expensive given its current growth profile and see better value elsewhere in the industry.

My preference at this stage is online travel agent Webjet Limited (ASX: WEB), closely followed by integrated travel company Helloworld Travel Ltd (ASX: HLO). I think both these shares currently offer a compelling risk/reward at current levels.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited. The Motley Fool Australia owns shares of Helloworld Limited. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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