The Flight Centre Travel Group Ltd (ASX: FLT) share price will be on watch on Monday following the release of an acquisition update this morning.
What was announced?
This morning the travel agent giant announced that it has once again strengthened its presence within its key international markets through an acquisition.
Hot on the heels of the acquisition of European corporate travel business 3Mundi last month, this morning Flight Centre revealed that it has acquired full ownership of North American premium leisure and corporate travel business Les Voyages Laurier du Vallon (LDV).
According to the release, Flight Centre secured a 75% interest in LDV in August 2017 and formally acquired the remaining 25% interest under the terms of a rolling put/call option that was agreed when it initially invested in the Quebec-based business.
The terms of the acquisition have been kept confidential and have not been disclosed with this announcement.
Flight Centre's managing director, Graham Turner, appeared pleased to complete the acquisition of a business which has become an important part of its Americas segment over the last couple of years.
He said: "LDV has proven to be a valuable addition to our network in the Americas and we are pleased to take 100% ownership of the business. In addition to delivering solid earnings growth over the past two years, its corporate travel presence has enhanced our already strong customer offering across Canada and throughout North America in general."
Mr Turner added: "In leisure travel, LDV's premium offering, which is similar to the highly successful Travel Associates model we use in some other countries, has complemented the Flight Centre branded offering in Canada and allowed us to target a broader customer base in this fairly large market."
This certainly appears to be a positive move by the company given the way the Americas segment is performing this year.
In FY 2019 its Americas segment is expected to record a profit before tax in excess of A$100 million, which is at least 42% higher than the A$70.2 million achieved in FY 2018.
Flight Centre will release its full year results on August 22 along with fellow travel shares Qantas Airways Limited (ASX: QAN) and Webjet Limited (ASX: WEB).
