Coach Holiday Group (CHG), owner of Wallace Arnold, has merged with Shearings in a deal worth £200 million.
3i, an existing shareholder in CHG has funded the transaction and following completion will hold 67.8% of the new group and management 32.2%, of which a proportion is intended for an employee share option scheme. Prior to the merger an institutional syndicate led by Bridgepoint held a 61.5% majority stake in Shearings. Completion of the deal is, amongst other things, subject to review by the Office of Fair Trading.
The merger of Shearings and CHG will upon completion:
*create one of Europe's largest coach holiday companies for the growing, affluent over 55 age group with a combined annual passenger carrying of nearly 1 million, a database of over 2.5 million people and over 3,400 employees
*create a dynamic new holiday company targeting the affluent and growing over 55 age group offering a combination of coach, air and hotel holidays to over 170 destinations throughout the UK and Europe
*bring together two of the UK's favourite coach and hotel holiday brands. The highly complementary brands will offer customers greater choice by way of more holiday destinations in the UK and Europe and improved levels of service from coach pick up points, over 40 owned hotels with more than 2 million bed nights in the UK and a fleet of over 400 coaches
*generate combined pro forma sales for 2004 of approximately £216 million and operating profits of £14 million giving the new group a 14% share of UK coach holidays, an industry worth £2.1 billion. It will also provide the opportunity to unlock substantial cost synergies principally by saving on duplicated feeder route costs
*provide an opportunity to create a business with greater critical mass to support further growth both organically and by selective acquisition
Bridgepoint first invested in Shearings in 1997. The merger results in Bridgepoint exiting the business completely, its first realisation of 2005.
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