Classic Collection reported underlying earnings of of £2.6 million and gross assets of £18 million in its latest statutory audited accounts for the 12 months to October 31.
On the Beach said the acquisition represented a continuation of its strategy, “while leveraging the group’s capabilities to access the circa five million short-haul beach holidays that each year are booked offline”.
The group will invest to grow Classic Collection’s portfolio of luxury holidays and will support Classic Collection to invest in, build and launch an online booking portal to provide travel agents with access to a portfolio of mainstream beach holiday product under a new brand Classic Online.
It will use On the Beach’s technology capability, product sourcing and scale in the short-haul beach market.
Classic Online will be available exclusively through travel agents and will not be a consumer site.
Classic Collection is currently owned by managing director Nick Munday, its directors and a number of small private shareholders.
The consideration shares will be issued upon completion to Munday, who will be subject to a lock in period and orderly market provisions.
Classic Collection’s existing management team will continue to run the business.
Munday said: "I am thrilled to be joining forces with Simon and the team at On the Beach.
“Partnering with such an innovative market leader will give our loyal network of agents access to an even wider portfolio of mainstream beach holiday product through the launch of Classic Online together with further investment to broaden the luxury offering of Classic Collection."
Simon Cooper, chief executive of On the Beach Group, added: "We are excited about the opportunity to access the circa five million short haul beach customers that book holidays offline each year.
“Classic Collection has an excellent reputation in the industry and we look forward to working with Nick and the team to expand both of our product offerings.”