Cheapflights parent Momondo admits to interest from potential investors

By Travolution
By Travolution
July 21, 2014 08:01 AM GMT

Cheapflights parent Momondo Group has confirmed it has appointed a financial advisor to look at strategic options for the firm amid reports that it in talks about a sale of a stake in the business.

Sky News claims that the potential deal would value the group at £150 million and it is in talks with a handful of trade and private equity firms.

Other reports claiming Expedia and Sabre are among those potential bidders are understood to be purely speculative, but Momondo is thought to have attracted interest from a selection of trade and private equity suitors.

The company is exploring a sale of the business after receiving buyout approaches from several parties and has hired advisors at corporate finance firm Arma Partners to look at strategic options for the business.

In a statement Momondo Group said: “Momondo received a number of proactive approaches from interested parties about the possibility of investing in the business in the second half of 2013 – prior to the Group releasing its sales and Q1 results.

“Momondo Group has exciting growth plans which it is delivering on. It is already seeing strong revenue growth, driven by international roll out of its meta business model, product innovation and expansion into new categories.

“Momondo Group can confirm that, in the light of the earlier approaches in the latter part of 2013, it has appointed Arma Partners as advisors to look at strategic options for the business as it drives forward the next stage of its growth strategy.

“Any valuation would depend on the type and timing of any investment. We would stress that we are extremely well-positioned to continue to grow the business – and our preference is for an investment from an organisation which shares our vision for the continued international expansion of Momondo Group and rollout of the brand globally.”

Momondo generated revenues of £43.3 million last year, while it reported a 20% increase to £14.5 million in the first quarter of 2014.

The business also reported £3.2 million of earnings before interest, tax, depreciation and amortisation. The group’s overseas business now generates 84% of the revenues, with 40% of visits to its Cheapflights site from mobile devices.

Cheapflights acquired Danish meta-search firm Momondo in 2011, which has led to growth in its international business under the rebranded Momondo Group.

Cheapflights was started by travel journalist John Hatt before Hugo Burge and former ABN Amro banker David Soskin led a buyout of the business in 2000.

Burge and Soskin’s investment vehicle, HOWZAT Partners, also sold rival meta-search business Trivago to Expedia for €477 million last year after being an early-stage investor.

Cheapflights withdrew from a planned flotation in 2008 during weakening market conditions. Burge is chief executive of the group, while Soskin has stepped back from the business but still retains an equity stake.

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