Flight Centre Travel Group (FLT) said on Tuesday (31 January) that it was hopeful of completing a deal for the British operator by the end of February.
In a note to Australia’s securities exchange, Flight Centre said Scott Dunn would "provide an entry point" into the UK and US luxury market, describing the business as a "well-regarded, scalable brand".
Around three-quarters (74%) of Scott Dunn’s business, based on total transactional value, is currently conducted in the UK market, followed by around a fifth (21%) in the US and around 5% in Asia, based on trading in the 12 months to 31 October 2022.
FLT said the acquisition, based on an enterprise value of Aus $211 million (£121 million), would be fully underwritten by an Aus $180 million institutional placement and Aus $40 million existing cash.
"Completion of the acquisition is not subject to any conditions and is expected to take place prior to the end of February," said FLT.
It is also offering eligible existing shareholders an opportunity to purchase more shares in the business in the hope of raising a further Aus $40 million (£23 million).
FLT will operate Scott Dunn as an independent business unit, with support from the wider group. It plans to retain Scott Dunn’s existing management team, who will continue to oversee the brand under FLT’s ownership.
Flight Centre said Scott Dunn was a "premium travel brand" dealing in high margin leisure travel in the "resident" luxury travel segment, characterised by "large average booking values and strong levels of repeat bookings".
The acquisition, it said, would allow the group to diversify its footprint in the northern hemisphere, while also underpinning its plan to expand in its core markets and develop a portfolio of global luxury travel brands.
’New era of growth’
Graham Turner, FLT managing director, praised Scott Dunn’s "strong and experienced management team" under chief executive Sonia Davies, and their efforts to build "a global leader in the luxury travel segment".
"Scott Dunn provides us with the opportunity to grow our leisure presence in the large UK and US luxury markets in an attractive and growing segment, while also fast-tracking our objective of developing a global luxury collection of travel brands," said Turner.
"High-net-worth, time poor customers highly value the services of Scott Dunn as show by their customers’ loyalty. The business ticks the main boxes we have defined to play in the luxury segment: exceptional service/high quality, an authentic brands with desired benefits, it has a prestigious image, commands a premium price, and is capable of inspiring deep connections with customers."
Turner added the acquisition would drive a new era of growth at Scott Dunn.
Davies said she was proud of the strength of the Scott Dunn brand in the UK and US, and its commitments to being a responsible business. "We’re excited now to continue our journey and accelerate our growth with the Flight Centre Travel Group."
