Balmer Lawrie eyes Rs 300 cr sales with Vacations Exotica buy

State-run Balmer Lawrie & Co, one of the top travel and tour operators in the country, today announced acquisition of Mumbai-based Vacations Exotica for Rs 20 crore, and said the deal is expected to generate an additional revenue of Rs 300 crore in 2014-15.

“We today acquired tour operator Vacations Exotica for Rs 20 crore, and it will boost our package-tour business as we are not that strong in package tours as we are in ticketing. That is why this acquisition will add synergy to our business,” Balmer Lawrie chairman and managing director Viren Sinha told reporters in Kolkata.

The acquisition is expected to generate additional revenue of Rs 300 crore in 2014-15, he said.

Sinha stated that the deal includes the takeover of the business and people of the private tour operator.

The 147-years-old diversified PSU is the largest travel and tour firm, providing domestic and international travel/ticketing/ tourism related services. Its tourism arm Balmer Lawrie Tours & Travel is the oldest IATA accredited travel agency in the country.

The deal will help the Central PSU to expand its value proposition and offer end-to-end services in the tours and MICE segment as Vacations Exotica brings with it a talented workforce and a wide range of holiday packages, said Singhi Advisors, which advised Vacations Exotica in the deal.

Balmer Lawrie Tours & Travel had net sales of Rs 656 crore last fiscal and ticketing business accounts for 90 per cent of this revenue.

Vacations Exotica management could not be reached.

Commenting on the deal, Ajoy Lodha, a partner at Singhi Advisors told PTI in Mumbai that travel business is going through a phase of consolidation as service providers want to add value-added services which can enhance margins.

The reduction of credit periods in ticketing business and also price-wars have pushed down margins in air ticketing business significantly.

Packaged tours business, especially outbound, has reasonable entry barriers and also far better margins and therefore attractive to players strong in ticketing space, Lodha added.