Kerry-based financial services firm Fexco has completed its acquisition of Alternative Investment Market-listed (AIM) online travel firm CNG’s Leisure Division for US$2.5m. The deal will see 48 CNG workers in Kerry transfer to Fexco.
CNG’s Leisure Division includes its business-to-consumer (B2C) hotel booking websites Placestostay.com and Cnghotels.com together with its worldwide hotel inventory of more than 25,000 hotel contracts. The business also includes contracts with hundreds of traditional and online travel agencies, as well as affiliates contracts with airline websites and other online portals, driven by CNG’s online booking and inventory management system.
CNG announced in June that following a strategic review of the business, it would exit from the B2C leisure market and seek a buyer for its B2C division, primarily the Placestostay.com website and related assets.
The company had listed on AIM in London last year. However, it has since been dogged by poor financial performance and in August an earnings warning caused the company’s share price to fall 15pc. The company last December made a loss of €5.6m on a turnover of US$55.5m. At an AGM in June, founder Finbarr Power resigned as CEO of the company.
CNG’s Leisure Division generated turnover of approximately US$14.2m for the year ended 31 December 2004 and its gross assets had a value of US$16.4m at 31 December 2004. Included in the gross assets is an amount of US$13.5m representing the investment in the Placestostay.com acquisition, which will create an impairment charge in the interim results to 30 June 2005 of US$11.4m. Net current liabilities at 31 December 2004 were US$3.1m and the division sustained losses in excess of US$2m for the six months ended 30 June 2005.
PJ King, acting CEO of CNG Travel Group, commented: “CNG will now be able to focus its resources and management time on core operations in our US-based Tzell corporate travel agency business. We will continue to develop and market our Travel Lodging Connector technology platform to travel agents.”
In terms of the future of the leisure division within Fexco, Dr Stewart Stephens, director of Fexco, said the company has a strong fit within the company’s existing Irish online accommodation and international car hire divisions. “Talents that are coming across will add greatly to our online travel division. CNG hotels gives us enormous scope for growth and we are really looking forward to working with our new colleagues to achieve that potential.”
The CNG assets acquired by Fexco will be integrated into its online travel division, which includes Gulliver Ireland, Novacarhire.com and Online Teetimes.
Gulliver is Ireland’s leading provider of tourist information and reservation services, and owns the Goireland.com portal, a leading online consumer shop window for Irish tourism products and services. Novacarhire.com is an online car rental broker that combines the best rates in almost 5,000 destinations worldwide with old-fashioned customer service. Online Teetimes (Teetimes.ie) features discounted rates and online availability at more than 40 Irish golf clubs and is Europe’s first real-time online golf booking network.
The rebranding of the acquired business will take place over the coming weeks, the company said.
By John Kennedy