Australian online travel agent Webjet has taken on a big challenge in agreeing to buy Asian OTA Zuji – which has operations in Singapore, Hong Kong and Australia – from Travelocity.com for $US25m.

Managing Director John Guscic (right) said the Zuji brand will be maintained and its business progressively migrated to Webjet's IT platform.

Zuji, which Mr Guscic said is the #1 online seller of air tickets in Singapore and Hong Kong, generated US$31m in revenue for the 12 months to June 30 on turnover of US$300m, with an estimated pre-tax profit in excess of U$5m for 2012 based on the acquisition earnings multiple 4.6, which is low.
Webjet for example has been trading at a PE of around 19x earnings.

It is Webjet's first major acquisition, although it did try to buy Travel.com.au in late 2007.

However on that occasion it was outbid by Wotif.com, which paid A$55m or so for a company that had accumulated losses of more than A$33m over the previous  eight years and never made a profit.

So the US$25m looks like a bargain price, but the real value will be determined in the years ahead.

Successful integration is key.

Full story:

www.traveltrends.biz/ttn555-webjet-buys-zuji-for-us25m-in-first-major-acquisition