Despegar.com, Corp., the leading online travel company in Latin America, today announced it has agreed to acquire Best Day Travel Group one of the leading travel agencies in Mexico, for a total consideration of approximately US$136 million, subject to the occurrence of certain closing and business conditions.
A portion of the purchase price is payable on a deferred basis and includes a variable component of up to circa +/- 10% of the total consideration, based on future performance.
According to Best Day, during 2019 the company recorded estimated unaudited pro forma revenues and EBITDA of approximately US$140 million and US$8 million, respectively, with online sales accounting for approximately 70% of total sales. Approximately 75% of its revenue is generated in Mexico, further strengthening Despegar’s footprint in this country. The remaining revenue is generated mainly in Brazil, Argentina, U.S. and Canada, among others. Packages, Hotels and Other Travel Products account for approximately 95% of its revenues.
Best Day operates a cross-platform business model. In addition to its Business to Consumer business operated through its online platform, call centers and more than 200 kiosks, the company offers ground transportation, tours and activities across Mexico main destinations.
On the B2B front, Best Day provides online wholesale travel products to agencies worldwide through its subsidiary HotelDO as well as white label services for major travel vendors, including exclusive partnerships with the largest Mexican airlines operating their packages platforms. Despegar expects to maintain the Best Day brands and network of kiosks as well as key executives.
Mr. Damian Scokin, CEO of Despegar, noted: “We are very pleased to have entered into this agreement with Best Day, which is aligned with the strategic priorities discussed at Despegar’s recent Investor Day. This is a significant milestone in our consolidation strategy that started with the acquisition of Viajes Falabella. Additionally, this acquisition is a significant landmark given our goal to continue expanding our operations in Mexico, Latin America’s most important tourism market and the seventh most important destination worldwide. Together, Despegar’s unique competitive levers combined with Best Day’s expertise in wholesale hotel offerings and destination services, will further enhance our value proposition. Best Day also has strong partnerships with leading travel vendors. We are acquiring a company with a solid strategic position and a successful track record that provides significant opportunities to strengthen Despegar’s presence in Mexico and to grow its Business to Customer value proposition.”
Mr. Julian Balbuena, President of the Board of Best Day, commented: “At Best Day Travel Group we are very proud of this transaction. We have been operating in the market for over 35 years, and the fact that a company like Despegar, the leader in the Latin American travel market, sees in us an opportunity to strengthen their value proposition in the Mexican market, speaks clearly about the capabilities we have built. For the Best Day team, it is an opportunity to enhance those capabilities to continue offering customers unique experiences with the travel company that has innovated like no other in the region over the last 20 years.”